KNUSFOR (5035) - Insider Asia’s Stock Of The Day: Knusford
April 27, 2015 : 11:01 AM MYT
Knusford Bhd
KNUSFORD (Fundamental: 1.8/3, Valuation: 3.0/3) is principally a trading company for building materials that also provides sales and rental of heavy machinery. The two segments accounted for roughly 80% of revenue with the remaining 20% coming from construction and property development.
The company’s major shareholders are the Sultan of Johor and Tan Sri Lim Kang Hoo, who is also a major shareholder in Ekovest and Iskandar Waterfront City Bhd .
Knusford has a pretty good earnings track record. Except for the distortion from an exceptionally high profit in 2011 (that was lifted by completion of the RM538 million coastal highway project in Iskandar Malaysia), earnings have been trending higher.
For 2014, revenue rose 37.8% to RM409.8 million, buoyed by sand supply contract (for the Plentong area) and completion of the Kajang Perdana property development project. Despite its loss-making construction division and a RM7.4 million receivables write-off, net profit increased 20.2% to RM27.9 million.
We are upbeat on its prospects. Knusford will benefit from on-going construction works in the country.
Earlier this year, Knusford formed a 45:55 joint venture with the construction arm of China’s state-owned Greenland Group to bid for major building jobs and infrastructure projects in Malaysia. The latter, a Fortune Global 500 company, has two massive waterfront developments in Johor Bahru, namely Danga Bay and Tebrau Bay.
Knusford has a solid balance sheet with net cash of RM52.6 million or 52.8 sen per share. That is equivalent to a substantial 29.0% of its market capitalisation.
Importantly, valuations are attractive. The stock is trading at trailing 12-month P/E of only 6.6 times compared to its 20% profit growth during this period. Plus, prices are 37% below book value of RM2.95. Excluding cash, P/E stands at a mere 4.7 times. A first and final dividend of 5 sen per share was proposed, giving a decent yield of 2.7%.
http://www.theedgemarkets.com
April 27, 2015 : 11:01 AM MYT
Knusford Bhd
KNUSFORD (Fundamental: 1.8/3, Valuation: 3.0/3) is principally a trading company for building materials that also provides sales and rental of heavy machinery. The two segments accounted for roughly 80% of revenue with the remaining 20% coming from construction and property development.
The company’s major shareholders are the Sultan of Johor and Tan Sri Lim Kang Hoo, who is also a major shareholder in Ekovest and Iskandar Waterfront City Bhd .
Knusford has a pretty good earnings track record. Except for the distortion from an exceptionally high profit in 2011 (that was lifted by completion of the RM538 million coastal highway project in Iskandar Malaysia), earnings have been trending higher.
For 2014, revenue rose 37.8% to RM409.8 million, buoyed by sand supply contract (for the Plentong area) and completion of the Kajang Perdana property development project. Despite its loss-making construction division and a RM7.4 million receivables write-off, net profit increased 20.2% to RM27.9 million.
We are upbeat on its prospects. Knusford will benefit from on-going construction works in the country.
Earlier this year, Knusford formed a 45:55 joint venture with the construction arm of China’s state-owned Greenland Group to bid for major building jobs and infrastructure projects in Malaysia. The latter, a Fortune Global 500 company, has two massive waterfront developments in Johor Bahru, namely Danga Bay and Tebrau Bay.
Knusford has a solid balance sheet with net cash of RM52.6 million or 52.8 sen per share. That is equivalent to a substantial 29.0% of its market capitalisation.
Importantly, valuations are attractive. The stock is trading at trailing 12-month P/E of only 6.6 times compared to its 20% profit growth during this period. Plus, prices are 37% below book value of RM2.95. Excluding cash, P/E stands at a mere 4.7 times. A first and final dividend of 5 sen per share was proposed, giving a decent yield of 2.7%.
http://www.theedgemarkets.com
