Posted on 9 March 2011 : What I Think Of KNM's Earnings Guidance
Let me repeat what KNM management said:
- KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million
That was from the horsie own mouth and this wasn't no hot shot analyst estimates and this horsie, KNM, is TELLING everyone that it will earn some EBITDA of rm 363 million for fy 2011 and rm 564 million for fy 2012.
And I remarked What I Think Of KNM's Earnings Guidance in that posting.
So KNM reported its Q1 earnings.
Here's the screenshot.
And here's what KNM has to say about their earnings.
- The Group achieved revenue of RM413.00 million, profit after tax and minority interest of RM19.02 million and EBITDA (Earning Before Interest, Tax, Depreciation and Amortisation) of RM39.89 million for the period ended 31 March 2011. Compared to the previous year, the higher performance for revenue and EBITDA in this year was due to higher revenue recognised and higher contribution margins, whereas profit after tax and minority interest in this year was lower due to lesser deferred taxation impact.
Ok it's only the first quarter but remember KNM had said:
- KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million
How?
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23 comments:
Simple, Moolah.
RM 39.89 mill x 4 = RM 363 mill
Your calculator result not the same, meh?
Damn!
Must buy a new cow-cool-ator now!
#$%&^*^(%#O@
aiyah, that is the problem with you guys relying too much on calculator instead of a simple mental calculation of EBITDA of 40mx4=160m, not 363m from Moolah's faulty calculator. Moolah asked "how"? For me if I am a shareholder of KNM, I will really "how" (cry in hokkien) if I look deeper into KNM's performance. Annualized earnings per share of 2x4=8 sen, utilizing 3772m of assets (ROA=2%) and 1796m of equity (ROE=4.2%) to earn 86m of annualized net income; and I pay RM2.53 (PER=33, I know Moolah is going to say "I don't talk about share price and "PER", annoying) for each share of KNM! Better jump into the river.
K C: Why you so like this one! :P
Somemore... you know I like KNM soooooooooo much. LOL! :P
You do know mental calculation is way so mental. :P
Thankz Moolah for your blog. And the friends from the farm really make my day. Keep up the pro bono work. Really helps to avoid the traps and reduce errors.Thanks a lot and god bless
K C: Did you consider the 'tax incentive' KNM 'enjoys'?
:P
Moolah, below is the recommendation to buy KNM by AmResearch today, just after KNM's financial results. You miss the boat again leow loh.
"We maintain our BUY call on KNM Group with an
unchanged fair value of RM3.25/share, pegged to an
unchanged FY11F PE of 14x – at parity to the stock’s
rolling forward PE average for the past three years."
Sometimes I just wonder analysts nowadays recommend buy just by listening to company earnings guidance alone or what. Don't they study the financial statements, not only the income statement, but the balance sheet and cash flows statement? Company can make all kind of projections but in my opinion, they must show that they have done it in the past. If not, how can I believe them? Maybe I am really out of date already.
Tax incentive, Moolah? What use if KNM doesn't seem to make much money?
K C: LOL!
Well said.
Some companies just knows how to stink the whole place up.
Oh Moolah,
You are dead wrong this time! EcmLibra also recommend a buy on KNM at a target price of RM3.43 today! Its report below:
"KNM Group (1QFY11 Results): Starting soft (Maintain BUY, TP: RM3.43) [download report]
KNM Group turned in a very weak 1Q that made up <10% of our full year estimates as they were still clearing a backlog of low margin orders. Going forward however, recognition from new turnkey projects is slated to pick up and as such, we view that earnings will be on track to recovery. Despite the poor showing, we are sticking to our positive outlook on KNM for now given strong RM5.4bn orderbook. Maintain BUY. "
Ooh Moolah,
How can all analysts are wrong and you alone are right on KNM? OSK also recommend buy KNM today at a target price of RM3.91. Its report summarized as "KNM (FV RM3.91– TRADING BUY) 1QFY11 Results Review: Gradual Improvement".
You really screwed up this time. LOL.
Damn! Ok. I am wrong.
Btw what's ECM's estimate earnings for KNM's fy 2011?
Moolah, below is ECM's writeup today:
"Impact on valuation and recommendation
Despite the poor showing in 1QFY11, we maintain our positive outlook on KNM as
we expect them to translate to profits their RM5.4bn orderbook this year.
We view that once earnings from new jobs start to kick in, KNM will be able to trade
up to their 1-year rolling historical average P/E multiple (since 2007) of 21x.
However, for now, we are using a more conservative multiple of 15x PE (market PE).
Pegging this to FY11 EPS derives our target price of RM3.43."
FY2011 EPS is projected as 23 sen per share.
LOLOLOLOL!
Damn! Damn! Damn!
Ok I am wrong.
ps: ECM estimate numbers for KNM's fy 2011, how many million ringgit?
ps: why I always wrong one?
*sob*
I previously worked as an engineer in a public listed construction company. One fact is that big contract does not always translate into big profit but often ends up the other way. Big complicated jobs need proper project management and without that, the project can actually lose huge amount of money. Unless it is government negotiated contracts which even if the company fumbles, it can still claim huge doggy variation orders. KNM has 5.4 billion worth of job in hand now. Yes, huge order book and may be more to come but has KNM proven to have make huge profit from most of its previous contract works? If KNM fumbles (not unlikely), can KNM claim losses? I hate Teochew music.
Heyyyyyyyy!
I seriously don't own any TEOCHEW music!
All analysts, OSK, ECM, AmResearch etc are blowing the trumpet for KNM. The tune is Teochew Music. It goes like this,"Kakikokaki", for those buying this stock.
You must be a fan of Teochew Idol.
Moo,
Quoted from your posting on 9 Mar : "Now because KNM's is telling all the research houses that it will earn so much, naturally the research houses have to base their fair value target projection for KNM based on these high numbers."
By sticking to
this unrealistic earnings guidance and consequently arrive at their earnings estimates (AmResearch even says 383m), won't the research houses are confusing many naive minds?
Moo, my inquisitive mind is in doubt again...sorry ah! :P
Scenario:
Management provides earnings guidance-->results released-->huge deviation-->analysts issue reports-->still project their earnings forecast within the confine of Management guidance numbers
Q:Analysts lacks objectivity in their reports?
Need an accounting expert to tell me on the newly implemented FRS standard.
With RM1bil borrowing, it better don't go down.....our financial system cannot withstand this shock. Intangible asset + goodwill 1.4x of share capital. If the will become no good, the impairment can turnaround the company??
Pls tell me mr moolah
Mun Wai: Q:Analysts lacks objectivity in their reports?
Err... I am lacking objectivity on how to answer you liao!
:P
solomon: With RM1bil borrowing, it better don't go down.....our financial system cannot withstand this shock. Intangible asset + goodwill 1.4x of share capital. If the will become no good, the impairment can turnaround the company??
Err.... usually.. if there is a will ... there's a way.... to find some Teochew music.
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