Glomac: Part II

Looking at Glomac earning results, I was wondering what kind of reaction we would have from the local brokerages.

I know OSK is one research house that covers this stock.

So i thought it would be interesting to dig a bit and see what OSK wrote about Glomac previously.

In Sept 2005, OSK had this coverage on Glomac: Glomac: Seen It's Darkest Hour

Note the very interesting first line.

Glomac's annualized 1QFY06 results was a sharp 64.9% below consensus estimates and 69.9% below our full year forecast.

Remember, Glomac only managed a net profit of around 4.367 million, was down some 56.7% against the previous quarter net profit of 9.811 million.

Now the most interesting or rather the most glaring thingy in my opinion is that OSK is projecting/estimating that Glomac will achieve some 52.8 million for this fy 2006.

Ooh-la-la!

And what was even more interesting is that this 52.8 million has been revised down by some 9%!

Amazing! Glomac announced a mere 4.367 million earnings for the first quarter for fy 2006, down some 56.7% on a q-q basis, OSK only revised their estimate earnings by a mere 9% to 52.8million.

Meaning OSK still expects Glomac to make some 48.4 million for the remaining 3 quarters for fy 2006.

Which works out to some 16.1 million earnings per quarter.

Ahem.

Rather optimistic again, isn't it?

Look at what they were saying then:

Trimming FY04/06 earnings forecast by 9.0% to RM52.8m to account for:
1) the abovementioned marketing expenses
2) lower launches (RM65m vs. RM113m earlier) at the Puchong project.
3) These were offset by higher GDV (RM300m raised to RM352m), completion rate (20% raised to 30%) and take-up (60% raised to 70%) at Suria Stonor.
4) We also incorporating RM6.0m contribution from new project Glomac Boulevard.

Look at point 2. The issue of lower launches. Well, as per what OSK is saying, it looks like Glomac is having lower launches but what makes me wonder is the issue of the lower launches. Cos a lower launch of rm65 mil vs rm113 million is pretty significant isn't it?

No?

And the next point OSK mentions:

FY07 earnings forecast is however raised to RM80.5m from the previous RM73.7m on stronger impact from Suria Stonor.

Wah! If fy 2006 was rosy, fy 2007 is even projected to be more rosier for Glomac.

Earnings is forecasted to reach 80.5 million!

Terror is terror is terror!

Glomac then was trading at a price of 1.36. OSK had a target of 1.96.

Which is pretty incredible.

An upside potential of 49.4% for a stock whose quarter-on-quarter earnings slumped by as much as 56.7%.

Cool!


next.... OSK latest write-up on Glomac!