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Gamuda
FY10 within expectations but below our forecast
• FY10 net profit of RM281m was within market expectations being 96% of forecast of RM291m but below our forecast of RM340m at only 83%. We had expected a sharply stronger property contribution which was 42% lower QoQ due to timing differences in progress billings. In addition, Water division pre tax profit of RM23.7m was weighed down with one-off maintenance expenses being 37% lower QoQ.
• In FY10, Construction continues to perform splendidly with pretax profit contribution of RM79.9m being 104% higher YoY. This is largely driven by improvements in pretax margin was 4.5% compared to 1.8% in FY09.
• YoY, FY10 net profit was 45% with improvement from all segments. Besides construction, property division and expressways pretax profit contribution grew 19% and 28% respectively on higher sales achieved especially in Bandar Botanic and overall higher traffic while FY09 was impacted by one off adjustments.
• No further dividend declared but total 12sens meet our forecast.
• Net cash grew to 160m from RM84m in 3Q10. This strong cash hoard enables flexibility in construction material inventory management but more importantly demonstrate the strong cashflow.
• Maintain FY11 and FY12 net profit forecast margins appear to continue to improve.
• Gamuda is positive that the proposed MRT project will proceed and they will be competitively placed to secure some projects to augment its currently remaining orderbook of RM6b.
• Strong sales at Bandar Botanic of RM820m in FY10 and expected to be RM880m in FY11 will compensate for delays in launches at Yenso Park and Celadon City which is expected in March 2011 and October 2010.
• Maintain HOLD with revised target price of RM4.12 (previously RM3.26) rolling over to FY12EPS of 22.9 sen and 18x PER being 2x premium to average sector PER of 16x given Gamuda’s inclusion into KLCI FBM30. Upgrade catalysts is the amount of contract secured in the MRT projects and launch of Vietnam projects.
FY10 within expectations but below our forecast
• FY10 net profit of RM281m was within market expectations being 96% of forecast of RM291m but below our forecast of RM340m at only 83%. We had expected a sharply stronger property contribution which was 42% lower QoQ due to timing differences in progress billings. In addition, Water division pre tax profit of RM23.7m was weighed down with one-off maintenance expenses being 37% lower QoQ.
• In FY10, Construction continues to perform splendidly with pretax profit contribution of RM79.9m being 104% higher YoY. This is largely driven by improvements in pretax margin was 4.5% compared to 1.8% in FY09.
• YoY, FY10 net profit was 45% with improvement from all segments. Besides construction, property division and expressways pretax profit contribution grew 19% and 28% respectively on higher sales achieved especially in Bandar Botanic and overall higher traffic while FY09 was impacted by one off adjustments.
• No further dividend declared but total 12sens meet our forecast.
• Net cash grew to 160m from RM84m in 3Q10. This strong cash hoard enables flexibility in construction material inventory management but more importantly demonstrate the strong cashflow.
• Maintain FY11 and FY12 net profit forecast margins appear to continue to improve.
• Gamuda is positive that the proposed MRT project will proceed and they will be competitively placed to secure some projects to augment its currently remaining orderbook of RM6b.
• Strong sales at Bandar Botanic of RM820m in FY10 and expected to be RM880m in FY11 will compensate for delays in launches at Yenso Park and Celadon City which is expected in March 2011 and October 2010.
• Maintain HOLD with revised target price of RM4.12 (previously RM3.26) rolling over to FY12EPS of 22.9 sen and 18x PER being 2x premium to average sector PER of 16x given Gamuda’s inclusion into KLCI FBM30. Upgrade catalysts is the amount of contract secured in the MRT projects and launch of Vietnam projects.
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