We met up with Faber’s Management for an update on its operations following the release of its 1QFY13 results. While the loss of income from its Sabah and Sarawak concession business seems inevitable, we continue to like the company for its solid earnings base, which is backed by its sturdy net cash per share of MYR0.85. Maintain BUY, with our SOP-based FV upgraded to MYR2.34.
- New concession agreement to be inked. Management highlighted that a new concession agreement for Hospital Support Services (HSS) will be inked soon upon the blessing of the Minister of Health Datuk Seri Dr Subramaniam Sathasivam. Upon finalization of that, Faber will hold a 40% stake in both the Sabah and Sarawak service areas vs its 100%
currently. While this would likely translate into a loss of income in the long run, Faber is looking to take up the subcontractor role for an interim period of six to 12 months to ensure operational efficiencies are adhered to amidst the transition phase.
- To focus on its non-concession segment. Management is looking to expand its non-concession facilities management services, possibly by 20%-30% pa, with an eye on the oil & gas sector in particular. For instance, it recently won a MYR18m building management contract for Johor’s new state administrative center Kota Iskandar for three years. Faber is also actively in talks with oil & gas players to potentially carry out management services within the fast-booming industry. We are forecasting its non-concession segment to chalk in revenues of MYR65m-MYR70m pa. Upgrades to our estimates are likely should there be any major contract wins in the near term.
- Scouting for landbank. On a side note, the outstanding gross development value of its property arm stood at MYR570m with unbilled sales of MYR40m as of 1Q13. Management is hunting for landbank, but we understand that nothing concrete has developed thus far.
- Maintain BUY. While the loss of income from its Sabah and Sarawak concession business seems inevitable, we like Faber for its otherwise solid earnings base backed by its sturdy cash pile of MYR312.5m with minimal borrowings, which translates into net cash per share of MYR0.85. Maintain BUY with our SOP-based FV upgraded to MYR2.34 (from MYR1.94 previously) as we roll forward our valuation to FY14.
Source: RHB
kamal89
1368 FABER FABER GROUP BHD
FABER - NOTICE OF BOOK CLOSURE
LISTING'S CIRCULAR NO. L/Q : 67983 OF 2013
Final dividend of 10 sen less 25% income tax per ordinary share of RM0.25 each.
Kindly be advised of the following :
1) The above Company's securities will be traded and quoted [ "Ex - Dividend"
]
as from : [ 5 July 2013 ]
2) The last date of lodgement : [ 9 July 2013 ]
3) Date Payable : [ 24 July 2013 ]
MANAGER, SEC. MARKET
2013-06-14 15:24