Stocks In Focus MY (Mah Sing, Privasia Tech, Sime Darby) – 01/12/14
Strong Upside Potential For Mah Sing
Mah Sing Group is known for its quick turnaround business model, tending to unlock the value of its land-bank quicker with an estimated project timeline of six to eight years, said Credit Suisse Securities Research.
The research house expects net profit to grow at a compounded annual growth rate of 20 percent, driven by record high unbilled sales of RM4.4billion.
It added that despite added that despite the strong growth in sales and net profits, rising 4.9 times and 3.7 times respectively, Mah Sing’s market capitalisation growth continued to lag, rising at a slow rate of 2.7 times since 2009.
Significance: Credit Suisse has given Mah Sing an ‘Outperform’ rating with a target price of RM2.90, said that the group’s business model has allowed it to achieve higher property sales relative to its landbank size.
Privasia Technology Upbeat About Future Revenue Boost
Privasia Technology expects its revenue to grow in the coming year after securing RM31.5 million worth of contracts from the Department of Survey and Mapping Malaysia (Jupem) and the Kuantan Port.
The deal with Jupem, which commenced in 2Q14 is set to run over the next two years, and would support Jupem’s mapping system. The group was also awarded two contracts tied to Kuantan Port to design, supply, intergrate and support for Container Terminal Operating System (CTOS) and Multi-Purpose Terminal Operating System (MTOS).
The group shared that it was seeking to expand its customer base in the outsourcing and consulting segment and is currently looking for opportunities to serve the telecommunication sector.
Significance: With its order book standing at RM159.3 million keeping the group busy until 2020, the group is optimistic about seeing growth in 2015 as outsourcing remained the preferred option whenever companies wanted to optimise costs.
Sime Darby Bullish On Growth Outlook
For the first quarter ended 30 September, Sime Darby posted a 2.4 percent rise in net profit toRM500.7 million, despite a 4.3 percent decline in turnover to RM10.1 billion. The firm is confident of its growth outlook, given the stabilised crude palm oil (CPO) prices.
The plantation division was the biggest contributor to the group’s earnings on the back of improvements in fresh fruit bunches production and oil extraction rate.
The group said its upstream segment achieved higher sales volume and lower operating cost in the quarter, in addition to improvement in operational efficiencies, which helped offset the lower average CPO price realised.
Significance: Sime Darby noted that its ability to drive operational improvements has helped cushion the impact for falling CPO prices. Malaysia’s mandate for biodiesel use to seven percent palm oil in stages from November, up from five percent, as it looks to lower stocks and prop up prices adds to the positive outlook for the group.
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Strong Upside Potential For Mah Sing
Mah Sing Group is known for its quick turnaround business model, tending to unlock the value of its land-bank quicker with an estimated project timeline of six to eight years, said Credit Suisse Securities Research.
The research house expects net profit to grow at a compounded annual growth rate of 20 percent, driven by record high unbilled sales of RM4.4billion.
It added that despite added that despite the strong growth in sales and net profits, rising 4.9 times and 3.7 times respectively, Mah Sing’s market capitalisation growth continued to lag, rising at a slow rate of 2.7 times since 2009.
Significance: Credit Suisse has given Mah Sing an ‘Outperform’ rating with a target price of RM2.90, said that the group’s business model has allowed it to achieve higher property sales relative to its landbank size.
Privasia Technology Upbeat About Future Revenue Boost
Privasia Technology expects its revenue to grow in the coming year after securing RM31.5 million worth of contracts from the Department of Survey and Mapping Malaysia (Jupem) and the Kuantan Port.
The deal with Jupem, which commenced in 2Q14 is set to run over the next two years, and would support Jupem’s mapping system. The group was also awarded two contracts tied to Kuantan Port to design, supply, intergrate and support for Container Terminal Operating System (CTOS) and Multi-Purpose Terminal Operating System (MTOS).
The group shared that it was seeking to expand its customer base in the outsourcing and consulting segment and is currently looking for opportunities to serve the telecommunication sector.
Significance: With its order book standing at RM159.3 million keeping the group busy until 2020, the group is optimistic about seeing growth in 2015 as outsourcing remained the preferred option whenever companies wanted to optimise costs.
Sime Darby Bullish On Growth Outlook
For the first quarter ended 30 September, Sime Darby posted a 2.4 percent rise in net profit toRM500.7 million, despite a 4.3 percent decline in turnover to RM10.1 billion. The firm is confident of its growth outlook, given the stabilised crude palm oil (CPO) prices.
The plantation division was the biggest contributor to the group’s earnings on the back of improvements in fresh fruit bunches production and oil extraction rate.
The group said its upstream segment achieved higher sales volume and lower operating cost in the quarter, in addition to improvement in operational efficiencies, which helped offset the lower average CPO price realised.
Significance: Sime Darby noted that its ability to drive operational improvements has helped cushion the impact for falling CPO prices. Malaysia’s mandate for biodiesel use to seven percent palm oil in stages from November, up from five percent, as it looks to lower stocks and prop up prices adds to the positive outlook for the group.
http://www.sharesinv.com
