Best 168 Sycal through its subsidiaries, engaged in construction and civil engineering contractors in Malaysia and Hong Kong. Its activities include production, trade in fresh concrete; the sale of building materials; industry, and leasing of aircraft parts and equipment. In addition, the company operates as a drilling piling contractor. It was originally called Cygal berhad and renamed Sycal Ventures Berhad look at its fundamentals: earnings ratio: 6.88 Roe: 9.83 Nta: 0.62 Eps: 0.061 Current assets: Short-term bank deposits: Rm5,643,000 deposits:. RM761,000 short term Bank loans: Rm1,198,000 long-term bank loans: RM5,802,000 from its financial situation, as long as the next year, it will become a net cash company. If it is able to maintain recent performance, it should be at least a year after-tax profit between 15m + 17m. In the background behind the scenes to see who it is? Pengurusan Danaharta Nasional Berhad is one of the government's institutions. 12/02/2015 13:31 (Google translate)
Sycal Ventures Berhad (9717), previously known as Cygal Berhad, is a low profile construction based company. While the company had it's property arm, most of the revenue and income is derived from the construction arm of the group.
Sycal Ventures Berhad had recently caught attention of some investor after putting up a several consistent quarterly performance that had been growing. For the past 4 quarter, the quarterly result had been better in terms of higher revenue and EPS than their previous corresponding quarterly result.
Where could Sycal be heading in the coming days, especially when the coming final quarter for FYE 2014 that will be going to announce soon around the corner. Let's have a quick look at the price movement of Sycal.
Based on the price chart, Sycal had been trying to pitch forward during the middle of September as a convincing strong volume is head for a test at RM 0.50. However, the attempt had fall short after the global equity market had weakened. Sycal had spent most of it's time consolidating at RM 0.40.
Should Sycal be able to break above RM 0.40 in a convincing manner in the coming days, Sycal will form a new trading range between RM 0.40 and RM 0.48.
Sycal - Cashing in
Sycal's focus had always been in the construction sector. While Sycal local construction base might be at Perak, it's services might not fall short in Kuala Lumpur as well. Sycal had been getting construction works from Cygal Development Sdn Bhd, which is one of the core client that had common owner. The most recent project is being the Pullman Hotel in Bangsar that was being contracted to Cygal Development Sdn Bhd and constructed by Sycal's construction arm.
To date, Cygal Development Sdn Bhd had owned approx RM 69 million, which will see periodic repayment starting from year 2014 to 2016, averaging RM 23 million a year into the cash flow of Sycal Venture Berhad. The huge cash coming in might rings an opportunity for Sycal to finally reward the patient shareholder with a possible dividend.
Cygal Development Sdn Bhd had a 12 year contract with Pullman Hotel until 2022, which puts up opportunity for Sycal for more jobs in the coming days when Pullman Hotel starts to expand for their next spot. Currently, there are 3 Pullman Hotel in Kuching, Bangsar KL and Putrajaya. There are possible outlook for Pullman to expand to Johor and Penang in the coming days.
Based on FYE 2013 result, Sycal had managed to put up 5.37 cents in EPS with a NTA at 0.59. For the year 2014, the cumulative 3 quarters EPS is standing at 4.56 cents, with huge growing revenue and net profit. NTA inched up higher towards RM 0.64 per share.
Sycal performance had been very consistent since 2013. Should Sycal start to give out dividend, it will definitely attract more investor towards this company in the coming days.
According to sources familiar with the company, Sycal's book order is currently sitting on more than RM 600m of jobs, a work good enough to keep the company busy for the next 2 years.
With the growing trend in Sycal, the projected EPS for FYE 2014 will be looking at a possible 6 cents, trading at a conservative PER x8 will value the company at RM 0.48.
Sycal will be an interesting stock in the coming days based on : - Anticipated better result in FYE 2014, with EPS projection at 6 cents, valuing the shares at RM 0.48 based on PER x8 - Indirect business opportunity with Pullman Hotel through Cygal Development Sdn Bhd - Cygal Development Sdn Bhd repayment of RM 69m from 2014 to 2016, averaging RM 23million a year, boosting company cash position, and also putting up chances for a dividend for shareholder - Huge order book amounting more than RM 600m in hand.
FY14 EPS jumped 37% to 7.45 sen as net profit increased 40% YoY to RM23.8m. If we look at 4Q14 alone, EPS also increased 21% to 2.89 sen. Key driver behind the good earnings growth for both FY14 and 4Q14 is the Property division which saw its PBT +114% YoY to RM12.2m. Property division is likely to have benefited from better property prices in Kuala Lumpur and Perak. Construction division PBT also jumped 24% to RM13.2m due to increased billing of contracts at Taiping and Ipoh and increased revenue from the ready-mix concrete operation.
Net debt position of 0.21x. As of 4nd FY14, SYCAL net cash is RM4.6m. This is based on its total cash of RM8.75m, short term loan RM4.3m, long term debt RM48.0m and equity of RM211.5m. Comparitively, many other construction company has high net gearing exceeding 50%. Trading at only 40.0 sen or 40% below Book Value of 67.0 sen. This could mean the stock is extremely undervalued as its earnings visibility is good at 3 years, relatively healthy balance sheet and high earnings growth in FY14 at 37% YoY.
Theoretical Target Price of 68.5 sen based on 9x FY15 Fwd. PE. The 9x PE is in line with mid cap construction valuation. FY15E EPS should reach 7.61 sen assuming 5% earnings growth to FY14E EPS of 7.45 sen.
Currently valued at only 5.4x PE and this is a significant mismatch between fundamental and its share price. Note that SYCAL still has outstanding order book of RM520m providing 1.3 years visibility. The Company also intends to launch property development projects in Taiping, Segari and Ipoh. With all these in, the market has significantly undervalued this HIDDEN GEM!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
winson_ming
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Posted by winson_ming > 2015-02-09 15:09 | Report Abuse
HAHA.....