Net profit rises 23% & 13% in the last 2 quarters YOY but share price up more than 50% in 6 months time, hmm...., price run faster than profit growth. Good luck.
Econpile’s 4QFY6/17 net profit rose 12% YoY, taking FY6/17 net earnings to MYR80.7m (+20% YoY), accounting for 98% consensus full-year estimate. Excluding MYR1.1m disposal gain, FY6/17 core net earnings rose 18% YoY. No dividend was declared for the current quarter.
The stronger FY6/17 results were mainly attributable to 26% YoY increase in revenue driven by piling and foundation works for property development projects, infrastructure and other segment. This more than offset a 1.4 ppts increase in effective tax rate to 27.6% (FY6/16: 26.2%) and a 0.7ppts decline in PBT margin.
Econpile is riding on the robust construction outlook, buoyed by recovery in property development and progress in infrastructure development. With an order book of MYR1.2b (equivalent to 2.1x of FY6/17 revenue), the street is forecasting a 15% 2 -year EPS CAGR for FY6/17-19.
Among some of the jobs are: 1) MYR48.5m piling works at Jalan Conlay Kuala Lumpur; 2) MYR92.5m sub-contract work for the KVMRT2 project; and 3) MYR570.4m foundation and basement structure works for Pavilion Damansara Heights, among others.
Note that the group is tendering for about MYR2b worth of jobs, consisting mainly large-scale mixed developments and infrastructure projects in railway and roadway such as LRT3 and KVMRT2. Although the group is currently running at tight capacity, some of the projects are nearing completion, and this will free up some capacity to undertake more projects.
Brokers are still positively biased on the stock with three Buys and one Hold. However, the mean target price of MYR2.93 is below its last traded price, suggesting that investors should only buy on pullbacks. At current price, the stock is trading at 16.2x consensus FY6/18 EPS of 18.5sen, higher than its 3-year historical average PER of 13.9x.
Econpile is an established pilling contractor led by Mr The Eng Cheng and Mr Pang Sar with 30 years experiences. The names of Econpile is established due to their on time delivery of projects and no delays, these will increase confidence on contractors towards Econpile.
Nothing is impossible. Econpile is known for its good track record and consistently getting infrastructure projects from govt. Most importantly, it is able to maintain profit margins and growth.
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....
heaven123
1,900 posts
Posted by heaven123 > 2017-08-21 10:55 | Report Abuse
below 3.00 still can buy.