Published on Business Times: Pintaras Q3 net profit surges 62pc
- PINTARAS Jaya Bhd's third-quarter net profit surged 62 per cent due to better contribution from its construction and manufacturing divisions.
It expects to report good numbers for the fourth quarter due to its outstanding orders.
However, it cautions that profit could be hurt by rising costs steel. Pintaras made a net profit of RM7.6 million for the quarter to March 31 2007. Revenue was up 22 per cent to RM44.3 million.
Since I had written on Pintaras Jaya before and I do keep track of this stock, I was confused by that news clip. Was it that good?
Here is the snapshot from Dow Jones News Clip.
And here is my compiled data of Pintaras Jaya.
As can be seen, Pintaras Jaya earnings was decent but it did not surged 62%!!
I wonder where Business Times got that set of information!
The following notes were taken from Pintaras earnings notes:
- For the nine months ended 31 March 2008, the Group's revenue increased by 2% to RM119.3 million from RM116.9 million in the preceding year, while profit before taxation grew by 20% to RM28.7 million from RM24.0 million for the respective period. The improvement is mainly attributable to higher contribution by the construction and manufacturing divisions.
The construction division recorded a lower revenue of RM88.1 million compared to RM89.1 million last year. Despite the decline in revenue, profit before taxation increased by RM6.3 million or 41% to RM21.9 million from RM15.6 million last year due to higher margins achieved.
Sales from the Group's manufacturing division grew by 12% to RM31.2 million from RM27.8 million last year, while profit before taxation rose by 43% to RM4.0 million from RM2.8 million last year. The increase was entirely due to better sales and margins achieved by the metal container operation.
For quoted investments, there was a gain on disposal of marketable securities of RM2.7 million but a loss due to an allowance for diminution in value of RM1.5 million, as against last year's write back in allowance and gain totalling RM4.1 million. The first quarter of 2008 saw one of the worst performances of equity markets in the world. In addition, the March election results triggered widespread selling in our local bourse.
My last posting was posted on Pintaras Jaya II.
Here are some of my thoughts on Pintaras earnings.
1. Sales revenue
Sales revenue is certainly positive, showing growth on a quarter-quarter comparison.
2. Earnings
Current twelve months earnings totals 27.147 million, indicating strongly that Pintaras should record decent growth this fiscal year.
3. Balance Sheet.
Total cash balances is 65.283 million.
This is where I see some issues that needs to be evaluated.
Inventories are higher and most important the receivables has risen quite substantially.
And of course the total cash balances consist of Short Term Investments totaling 27.415 million.
And again this is a massive issue for those who do not like to see our plc dabbling in such investments.
From the company's own notes:
- For quoted investments, there was a gain on disposal of marketable securities of RM2.7 million but a loss due to an allowance for diminution in value of RM1.5 million, as against last year's write back in allowance and gain totalling RM4.1 million. The first quarter of 2008 saw one of the worst performances of equity markets in the world. In addition, the March election results triggered widespread selling in our local bourse.
And here is a snapshot from its earnings notes.
How?
2 comments:
buy
My Dearest Peisheah,
You do mean buy this stock, yes? :P
Just for your information, OSK has a report on this stock.
Here is a snippet from it:
Above expectations. From a y-o-y perspective, Pintaras displayed a 2% growth in revenue. However, owing to expanding margins, earnings growth came in much higher at 16.3% y-oy. Margins continue to remain healthy at 23.2% gross level and 18.3% net level. Vis-à-vis our initial projections, revenue numbers were spot on while earnings came in 14.3% higher when annualized.
Segmental analysis. EBIT of the manufacturing division rose by as much at 42.6% driven by both higher sales and margin expansion. Strong performance of the manufacturing division was due to higher demand for its metal cans by paint producers. This is consistent with the recent increase in property developments (new properties need to be painted!). Our property analyst, Mervin Chow postulates that the influx of property supply will continue to surge in 2008–09. This should augur well for the manufacturing division and we have conservatively factored in higher sales by 4–6% for FY09–10.
Slowdown of construction jobs? Recent changes in the political scene have brought about both delay and non commencement risk to the sector. Given that Pintaras is mainly involved in pilling and foundation works, slowdowns could be likely for its construction division. However, it is important to note that Pintaras has always displayed stable earnings even in the presence of a challenging external environment. For example, while many contractors suffered losses during the 1997 Asian financial crisis, the company managed to remain profitable. We believe that slowdown of construction jobs for Pintaras will be minimal given its strong reputation in pilling and foundation works.
BUY maintained. We maintain our BUY call on Pintaras with an upwards revised TP of RM2.93. Our TP is a function of 8x CY08 earnings. We have an earnings growth projection of 15.9% and 9.7% for FY08–09. Currently 33% of its share price is backed by cash (i.e. net cash per share is RM0.51).
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And there's a forum posting here: http://sahamas.net/forum5/5472.html
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Anyway... here are my concerns.
I'm rather cautious on the issue of the construction slowdown... and i'm worried about the increase in receivables. And most of all, I do not like to see the company dabbling so much in the share market.
rgds
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