The company actually would have recorded a PBT of RM2.4mil in 3Q18 if we were to exclude the RM9.9mil impairment charges on its contract assets and trade receivables. But it is still far from the RM13.4mil PBT recorded in 3Q17.
I think investors are just worried that the margin compression that we see in 3Q18 is here to stay. The negative outlook of the construction and property industries might make it challenging for the company to asked for higher margins from their clients now that there will be a lot of contractors eyeing for a smaller pie of future projects. Other piling companies like Econpile and Pintaras Jaya also recorded lower profit margins in their recent quarterly result.
For those that are interested in investing in the company it is advisable to wait for next quarter result to see if the profit margin compression seen in 3Q18 is permanent or just a one off event.
Current investors need to have the stomach to face some volatility given that if the margins are to be as what was recorded in 3Q18, profit would most probably be at a very low level in FY19. This will make the valuation of the company seems to be more expensive later.
For those that are looking for companies outside of the construction industry to diversify your portfolio, i would recommend you look at MBMR.
The company is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year 4Q17. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.
Hope profit margins will improve in 4Q. Because if it does assuming a PAT of RM2mil per quarter, or RM8mil for full year, Ikhmas is actually only trading at 8.5x PE.
Now it's officially "sen stock"....means people are selling it at a loss.... Is this counter that bad? Everyday people are selling it like there's no tomorrow. I'm stuck and become their long term investor already.... Trapped. Think this is all time low.
if base on constr like Zelan wct , or other from lowest ik not up too much some is up 100% ik still need add oil\ ipo and now loss until no pant s now is nothiung up too slow not like Zelan up limit upppppppppppppppppppppppp
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....
SWT1988
1,347 posts
Posted by SWT1988 > 2018-10-24 16:13 | Report Abuse
On the way to 0.10???