Business Times carried a short write of ECM Libra Avenue research notes in today's papers ( here )
- BLand a growth story, says ECM Libra Avenue
October 17 2007
BERJAYA Land Bhd (BLand) is a growth story, says ECM Libra Avenue Securities, taking into account the property firm's earnings-enhancing business portfolio.
Of significant interest about BLand are its six overseas projects worth RM37.2 billion in addition to undeveloped valuable land in Kuala Lumpur.
BLand is also expected to enjoy steady cash flows from dividends as well as equity-accounted profits from its 48 per cent stake in "crown jewel" associate Berjaya Sports Toto Bhd (BToto).
"Our recent visits with the management have left us coming away fairly optimistic of BLand's growth prospects," ECM Libra Avenue wrote in a note on last Thursday.
Citing examples, the research house indicated a 33-sen annual rise in BLand's fully-diluted earnings per share by applying a 10 per cent net profit margin on its RM37.2 billion worth of property jobs in China, Thailand and Vietnam.
This, in turn, translates into a RM3.7 billion net profit to be recognised over the next 10 years.
On BToto, ECM Libra Avenue expects the gaming entity to sustain its 40-sen gross dividend per share payout at least in the next three years, hence, translating into an eight per cent gross yield.
On BToto's 90 million treasury shares, it said that if the shares were cancelled, it would reduce BToto's share capital base and, therefore, increase its earnings per share.
However, shareholders also stand to gain higher dividends if BToto decides to sell the securities in the market, assuming the entire proceeds are returned to shareholders as a special dividend.
"BLand stands to benefit significantly given its controlling 48 per cent equity stake in BToto," said ECM Libra Avenue, which initiated coverage on BLand with a "buy" call and a RM5.50 price target.
The above table is posted in that article.
Now, let's look at Berjaya Land growth as stated.
In 2005, it earned 67.5 million
In 2006, it earned 89.1 million.
In 2007, it earned 32.3 million! (hey... where's the growth????)
Seriously. Won't that had been deemed as a DRASTIC decline in earnings???
Anyway... here is the whopping growth...
In 2008, Berjaya Land is FORECASTED to earn a whopping 497.2 million!
In 2009, Berjaya Land is forecasted to earn only 212.5 million!
Err... IF 2008 numbers can ever be achieved.. then surely 2009 earnings of 212.5 million would have been a DISASTER for Berjaya Land, right?
And just for the record.. Berjaya Land earned 38.203 million for the first quarter of its fiscal 2008.
Which means, for Berjaya Land to achieve this INCREDIBLE earnings projection of 497.2 million, Berjaya Land has to earn some 459 million for its remaining 3 quarters.
Oh.. and if my maths is correct.. and if my calculator fails me not, that's ONLY about a quarterly earnings of 153 million!
Ahem.. which means... ECM Libra is saying that Berjaya Land earnings to increase by a WHOPPING 500% percent the next quarter!
And now that is GROWTH babe!
Fooooooooooo!!
Can I vote this as the SEXIEST report of the year?
Know what? i notice ECM always exaggerate their reports. even after doing my calculations, i could'nt match theirs. THere are only 2 possiblities, either ECM people know something that we dont, or they simply miscalculate and exaggerate.
ReplyDeleteOr, it could be that BERJAYA bosses tell them to write something ridiculous to push the stock higher then simply sell a lot at the top. i dont know...