Gabungan AQRS: Minimal impact from revised LRT3 project. Although Gabungan AQRS will be affected by a “scaled down” version of the Light Rail Transit 3 (LRT3), the impact on the company’s overall order book will likely be minimal. According to its vice-president for strategic planning & investment, Ridhwan Effendy, the mid-cap construction and property development company will likely see a reduction of only RM100m in its orderbook, following the cancellation of the Temasya station, which is one of the five aborted under the revised version of the LRT3 project. (StarBiz)
Gabungan AQRS Bhd (July 13, RM1.26) Maintain buy with a higher target price (TP) of RM1.60: Gabungan AQRS reported its first half ended June 30, 2018 (1HFY18) results that were above our expectations but within the street’s expectations.
Gabungan AQRS reported a net profit of RM35.6 million in 1HFY18 comprising 50% of consensus full-year forecast of RM71.4 million and 64% of previous estimate of RM55.4 million.
Revenue jumped 32% year-on-year (y-o-y) to RM314.7 million on higher construction (+42% y-o-y) and property development (+70% y-o-y) revenue.
Profit before tax (PBT) increased 36% y-o-y to RM48.7 million in 1HFY18, mainly driven by higher construction PBT (+66% y-o-y) and interest income while its property division incurred a small loss.
Net profit was up 52% y-o-y with lower effective tax rate. Excluding the one-off land sale gains in 1HFY17, core net profit jumped 249% y-o-y to RM35.3 million.
Gabungan AQRS’ high remaining order book of RM2.5 billion comprising the Sungai Besi-Ulu Kelang Elevated Expressway, Kota Sultan Ahmad Shah and light rail transit (LRT) Line 3 projects will sustain construction earnings growth. Gabungan AQRS targets to secure another RM1.5 billion worth of new contracts. Poor sales for The Peak development continues to drag down property earnings.
Unbilled sales of RM128 million and unsold property units valued at RM486 million will contribute to property earnings in FY19 to FY22.
Gabungan AQRS also plans to launch its E’Island Residence affordably-priced apartments (1,104 units) with total gross development value of RM491 million in 2H18.
We upgrade earnings per share (EPS) by 7% to 14% in FY18 to FY20 to reflect better construction PBT margins. Construction PBT margin was high at 16.7% in 1H18 as its projects move to more advance stage of construction.
Assuming a higher sustainable construction earnings of RM70 million (RM60 million previously), we lift our fully-diluted revalued net asset value per share estimate to RM2.30. We reiterate our “buy” call on Gabungan AQRS with TP raised to RM1.60 from RM1.48, based on the same 30% discount on the lifted RNAV per share. Key risk is slower order book replenishment and execution.
As for WCT, which has been overly oversold, upside potential is very high similar like this gbgaqrs, also myeg, gkent, mrcb, along with trade war sell off counter.
So many bargain now as market has rebound, you can pick any good FA stock, rsi below 50 or 30% and MA > 14-28 days and discount >50% from high side.
KUALA LUMPUR: Gabungan AQRS Bhd (GBG) has proposed to a bonus issue of Warrants B on the basis of one Warrant B for every four existing shares held to reward existing shareholders and to raise additional working capital, when Warrants B are exercised in future.
The implementation of Warrants B will be after expiry of Warrants A on July 20. The exercise price of the Warrants B will be determined and announced at a later date after the receipt of all the relevant approvals but before the entitlement date.
In a statement, GBG said the new issuance of Warrants B was appropriate avenue for rewarding the existing shareholders of GBG after taking into consideration several factors.
The factors included rewarding existing shareholders of GBG for their continuous support by enabling them to participate in a derivate of the group without incurring any additional cost as well as to provide the shareholders with an opportunity to further increase their equity participation in the group by exercising their Warrants B at a pre-determined price over the tenure of the Warrants.
GBG said the issuance of Warrants B would also allow the group to raise additional working capital when the Warrants B was exercised in the future, without incurring interest expenses compared to bank borrowings.
“Looking ahead, I am confident that the Group will continue to record positive growth in 2018 from all fronts, including its financial position, construction order book and property sales.
“Our tall construction order book of RM2.8bil would ensure earnings visibility for the next 3 financial years,” group CEO Datuk Azizan Jaafar said.
He added that as at 1Q18, the group had strengthened its balance sheet, with its net gearing being lowered further to 0.06x (compared to 0.11x in 4Q17).
“The group’s cash balance continues to be healthy, with a in unencumbered cash pile of RM137.2mil, which is set to further grow post the receiving of our retention sum for the MRT job that was received in 2Q18,” Azizan said
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....
secret1q
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Posted by secret1q > 2018-07-13 05:59 | Report Abuse
The jump down gap to be close, jump up to 1.56 today