Excel – http://1drv.ms/TNAr6c
– Fair value:
– 5Y DCF: 2.91 – 3.26 (MOS: 40% – 47%)
– Absolute EY%:
– FY14 (EPS: 0.16) – Buy under 1.78, sell above 2.12
– R4Q (EPS: 0.164) – Buy under 1.82, sell above 2.17
– FY15 (EPS: 0.179) – Buy under 1.99, sell above 2.37
– I think GKENT is still undervalued. If we just looking at the current EY% and FCFY%, the EY% and FCFY% are 9.25% and 10.06%.
– GKENT has very strong competitive advantages where it is in a very good position in building wide economic moats.
– GKENT has been moving in the range from 0.4 to 1.7 since 2004. It couldn’t break 1.7 twice (2004 and 2010). However, since 28 Mar 2014, GKENT has been so bullish (without obvious correction) and closed at 1.7 on 11 Apr 2014. For those investors who spotted and invested GKENT at lower price, thumb up to them.
– The Group is proposing a bonus issue of 75,102,542 new ordinary shares on the basis of 1 bonus share for every 3 existing shares held. Subject to shareholders’ approval, the Proposed Bonus Issue will result in an increase in the Group’s issued and paid up number of shares to 300,410,168 from the existing 225,307,626 shares.
– On 30 May 2014, GKENT completed the construction of the Semantan Intake Pahang-Selangor raw water transfer project, which was delivered on schedule. The completion of the former and the recognition of the tail-end revenue of the latter were the main reasons for the Group’s decline in its quarter-on-quarter revenue.
Latest Financial – Q1 2015 Financial Report (30 Jun 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1670461
At the time of writing, I owned shares of GKENT.