Thursday, June 24, 2010

A Quick Look At Fajarbaru Builder

Here's a review on a smallish construction stock, FajarBaru.

( Those who knew me well, know that I followed this stock quite long ago. Yeah.. hiding where so long huh? :P)

Yes, this stock did not have a great history in the past ( LOL! It was once a lobster mobster stock too:
Flashback: The 2005 Fall of the Speckies ) but since changing its name from Fajar to Fajarbaru, things have indeed changed for the good. (Need to give credit when it's due again. ;) )

At one time, Fajar look interesting because the market discounted it had won a judgement and settlement on a rather lump sum profit guarantee (it was large given the size of Fajar back in 2007) of around 19 mil. However winning judgement and the actual payment of settlement can really drag on and on and on. :P

Since then, Fajar had a couple of name changes. It's now known as Fajarbaru Builder Group Bhd.
Anyway, here's the most recent financial data on Fajarbaru Builder. (own compilation - so table 'might' consist of errors! :P )

Since 2008, earnings growth has been impressive and if the ttm (or trailing twelve months) numbers is worth its salt, then Fajarbaru should be seeing earnings of around 23 million for its fy 2010. Which is impressive.

And it's extremely healthy. A piggy bank of 123 million is indeed very impressive for a construction company.

Having said that, looking at those numbers alone is not really accurate because there was a very significant reason why the cash improved so much.

For example, fiscal 2009, saw the company making a rights issue with warrants. ( see link here at Bursa ). This boosted cash balances by more than 23 million.

And the company had a recent placement of shares of around 10%.

All in which helped boost Fajarbaru warchest.

And then the settlement of profit guarantee issue... saw this announcement clip on Tuesday...

  • The Board of Directors of the Company wishes to announce that further to the announcements on 3rd January 2007, 9th August 2007 and the quarterly financial results announced on 29th April 2010 respectively, pertaining to the settlement of profit guarantee from Mr. Koh Se Lian @ Koh Kim Seong (the Defendant); the Board has accepted the Defendants settlement proposal via his letter dated 14th June 2010 (received by the Company on 21st June 2010) to settle the balance of six (6) quarterly installments for the total amount of Ringgit Malaysia Five Million Five Hundred Eighty Nine Thousand Two Hundred Sixty Nine and Cents Sixty Five (RM5,589,269.65) by an early settlement of Ringgit Malaysia Five Million (RM5,000,000.00) to be paid in three (3) installments within four (4)months

LOL! Another 3 installments to be paid within 4 months. But 5 million is 5 million.

And cash per share is something which makes some go crazy. (Personally I am not a fan) . Currently Fajarbaru market cap is around 160 million and its cash is about 123 million. Or Fajarbaru currently has 166.210 million shares. With a cash balance of 123 million, this works to a cash per share of around 74 sen.

Recent news can be read here: here and here


Worth a bet?

ps: disclaimer: this is my flawed look at Fajarbaru and I cannot guarantee if you could LOSE money in the stock. :/