Review Of KNM's Earnings

KNM reported its earnings on 30th Aug 2010. And as expected, it wasn't nice at all.

LOL! 'And as expected'?

Well ... seriously what do you expect from the company when the management was more focused on trying to buyout the company? Yes, where is the company's focus? What's the company's priority?

Is the company focused on making more money?

Was it?

Apparently the company's management was more focused on its management buyout than its own business.

How unlucky for the investing public that the MBO had failed!

Yes... what do you expect? what did I expect?

:P

Posted one time too few....

1. 24 June 2010: KNM: I Just Love The Way The Boss Talks!
2. 26 May 2010: Oh KNM, Can You Please Buyout The Company At 90 Sen? ( How unlucky the minority shareholders the buyout failed! :P )
3. 28 April 2010: I Just Like KNM So So So Much
4. 22 April 2010: Why I Like KNM Even So Much More Today!
5. 21 April 2010: Why I Also Like KNM A Whole Lot
6. 15 April 2010: KNM's MBO Fails
7. 23 March 2010: KNM: Should I Stay Or Should I Go?
8. 23 March 2010: KNM: Do Show Us The Money!
9. 22 June 2009: More On KNM
10. 17 June 2009: Regarding KNM's MD Disposal Of Shares For A Cool RM64 Million ( Did you miss this? Did you? Did you? :P )
11. 26 November 2008: KNM Q3 Earnings (where's the creation of wealth?)
12. 27 Oct 2008: Regarding KNM's Sell Down! ( Did you also miss this? :P )
13. 24 Oct 2008: KNM Comments About BTimes Article (LOL!)

So how poor was KNM's earnings?

Current fy 2010 ytd numbers indicate that 2010 would be another disappointing year and it should be even worse than 2009! Which would means two years of earnings decline!

And if memory does not fail me, KNM became a darling stock because of its spectacular earnings growth ( aha.. the 'engineered' growth via acquisitions and.... debt! :P )

In 2004, it earned only 15 million. 2 years later it earned some 133.5 million. Yup! Spectacular earnings growth and the market loved what it saw and KNM became a darling stock.

And that's not all!

The earnings table above is 'distorted' because KNM's earnings was boosted by the "recognition of tax incentive granted for Borsig acquisition".

Now imagine if KNM did NOT get this tax incentive?

Can you picture how 'good' KNM's earnings was??????

Exactly!

Don't you wish for that so-called 90 sen MBO!!!! :P

Now apparently, MiB ( Maybank Investment Banking yo! And not Men In Black! :P ) disagrees! MiB reckons that KNM is 'recovering'! :P


And the statement that stood out the most was...

• KNM remains a Buy with a RM0.55 TP (9x 2011 EPS). We see limited downside, for most of the operating negatives have been priced in. Reputation rebuilding remains a work in progress.

Limited downside! The classical 'negatives all priced in'!

Huhu! Wiki wiki!

KNM currently down some 9.3%. It last traded at 44 sen. ( That MBO price... how muchie? :P :P )

Now the BUY TP.... based on 9x 2011 EPS.

Sounds reasonable at first sight but apparently stocks and recommendations is unlike love at first sight!

Time to check out KNM's estimates. :P

And MiB 'expected' earnings for KNM is 232.4 million for KNM's fy 2011!

Remember, KNM's ytd 2010 earnings is 54.478 million (which was boosted by some 45.474 million in tax benefits!).

How?

Do you like KNM or not?

:P

AirAsia 18 Billion Tax Issue

Yesterday MIB, Maybank Investment Bank, had a research report on AirAsia.

Here's the snippet.

Now I am not (typo!) deeply concerned with this revelation.

Why?

This is an rm 18 Billion concern for me.

In the posting AirAsia's deferred taxes issue.

• Solid theoretical backing for AirAsia’s accounting policy. We believe that AirAsia has a strong case for its non-provision of deferred taxes. With capital allowances and investment allowances likely to come to RM18bn in total, the company will not have to pay cash taxes for decades. In these circumstances, a deferred tax liability provision will not be a true and fair reflection of the company’s financial position. With the MOF now seeking input from the "big four" audit firms, we think that a solution in favour of AirAsia will be found soon.

Well as per latest (see posting What AirAsia Said About Its Earnings Performance ), AirAsia has so far 930.591 million in deferred taxes!

Well as a wholly owned Malaysian company, some could argue that perhaps we, Malaysia, should attempt to develop a strong global company and in order to help achieve this goal, perhaps some sacrifice should be made. Sacrifice like granting AirAsia deferred taxes. However, some might disagree and argue that the taxes should not be deferred and the money collected from these taxes could help the whole country instead of helping just one company.

Well this could be a massive debate.

However, this new MIB research report has now put the tax issue in a whole new perspective!

Why?

Well simple. Since the ownership of AirAsia now has more foreigners than Malaysians, then why should the company continue to enjoy this deferred tax???

My friends... rm 18 Billion ... that's a whole lot of small change, yes?

How?

------------

see also More On AirAsia Deferred Tax

Featured Report: MIB On Astro All Asia

I had voiced my concern on Astro increasing its stake in South Asia FM.

MIB (Maybank Investment Bank) had a report out and I was lucky to grab a hold of it. In it..

• South Asia FM is loss-making. It recorded a RM51.9m net loss RM51.9m in FY09 and although Astro is positive about its long term prospects, is not expected to break even for at least another two years. As it is now an associate, Astro could recognize its share of losses amounting to approximately RM10m p.a. (RM51.9m X 20%). We maintain our earnings estimates as the impact on earnings is not significant at <5%>

So how?

South Asia is making losses!

And Astro is pumping more money in it.

Incredible yo!

And needless to say MIB adds.

• Expensive at 3.4x book. We understand that only Astro has injected equity into South Asia FM only recently. The additional 13% stake acquired values the whole company at RM465.1m, equivalent to 3.4x its enlarged net book value (RM85m FY09 net book value + RM50m subscription proceeds).

Is Astro making any sense?

Increasing stake - paying more money and at an expensive price for a company that is losing quite a lot of money?

How la?

Does it's shareholders knows exactly what is happening? For I sure do not!

Valuations Stretched To Unjustifiable Levels But....

On the Edge Financial Daily. Market rally stretches valuations to unjustified levels, says Maybank Equity Research

• Market rally stretches valuations to unjustified levels, says Maybank Equity Research
  Written by Surin Murugiah
  Monday, 22 June 2009 11:00
  
  The market rally has stretched valuations to levels unjustified by earnings growth, since an economic and corporate earnings recovery is likely to be anemic, said Maybank Investment Bank Equity Research.
  
  Nevertheless, it said there is money to be made yet in equities, and the new prime minister's initiatives may inject positive sentiment.
  
  "A change in benchmark indices may introduce some volatility and large cap buying in early July. Risks include policy shocks should policies to address the financial crisis be reversed," it said in a note June 22.
  
  "We believe market valuations at 15.6 times and 14.2 times 2009E and 2010E earnings are expensive for the growth (-8.4%, +9.8% respectively) and the market is expecting an unrealistically rapid recovery."
  
  "The Malaysian market does not compare well against regional peers, especially Indonesia and Thailand, which have lower p/e and higher 2010 earnings growth," it said.
  
  Maybank Research said from a top down perspective, it did not expect much more upside from here, adding that to characterise the research house as bears would be inaccurate, since it has 33 buys against 29 sells.
  
  The research said the 30-stock FBM 30, to be adopted as the benchmark KL Composite index in early July, may not be universally adopted as the benchmark index due characteristics associated with its concentration in a small number of stocks and sectors.
  
  It said Public Bank, Bumi-Commerce and Resorts World benefit from a rise in their weighting in the benchmark index, while Petronas Gas, PLUS and Digi will have their index weighting reduced, regardless of whether the FBM100 of FBM 30 is chosen as the alternative benchmark.
  
  The research house said Prime Minister Datuk Seri Najib Razak would embark on new initiatives to reinvigorate the ruling coalition's popularity.
  
  "Hints have been dropped over relaxing certain Foreign Investment Committee requirements and embarking on a new economic model," it said.
  
  "The slow spending from the fiscal stimulus packages and weaker than expected 1Q GDP growth adds further pressure on the leadership, so the next two to three quarters are likely to be bumper ones for construction and building material companies."
  
  Maybank Research said its buy list included construction and buildings (Gamuda, IJM Corp, Sunway Holdings, Kinsteel, Lafarge, Hock Seng Lee), with some monopolies (Tenaga, Telekom, MAHB, PLUS, LITRAK) and selected consumer stocks (AEON Co, Resorts World, Guinness, KFC, JT International).
  
  Meanwhile, its top sells are stocks where prices have exceeded consensus target prices by the highest margin (SP Setia, Bursa Malaysia, MISC, KL Kepong, Asiatic Development), it said.

LOL! The first two lines kinda contradicted each other.

• The market rally has stretched valuations to levels unjustified by earnings growth, since an economic and corporate earnings recovery is likely to be anemic, said Maybank Investment Bank Equity Research.
  
  Nevertheless, it said there is money to be made yet in equities, and the new prime minister's initiatives may inject positive sentiment.

Strecthed valuations to unjustifiable levels...

but...but... but....

NEVERTHELESS .... money is there to be made.

LOL!

Nice one!

Macam mana ni bang?

Maybank's Warning That KL Market May Start To Falter And Some Comments On Kinsteel

On Business Times: KL market may start to falter: Maybank Investment

• KL market may start to falter: Maybank Investment
  Published: 2009/05/27
  
  A 'recession in corporate profits' may have just begun as 63 per cent of companies under Maybank's coverage had reported lower sequential quarterly net profits.
  
  THE Malaysian stock market rally has reached a point where it may start to falter, says Maybank Investment Bank.
  
  "We believe this market rally has pushed valuations to the point where growth expectations have reached implausible levels. In fact, (corporate) profits have just begun to turn down," its analyst Andrew Lee said in a report yesterday.
  
  A "recession in corporate profits" may have just begun, he said, pointing out that 63 per cent of companies under Maybank's coverage that had released their first quarter financial results had reported lower sequential quarterly net profits.
  
  "History tells us the bear market isn't over," Lee remarked.
  
  Still, Maybank isn't overly bearish on the market. It has more "buy" recommendations on companies than "sells".
  
  "We are not overly bearish but we caution that optimism over growth can disappear as quickly as it appeared," he said.
  
  The Kuala Lumpur Composite Index (KLCI), which rose at an eighth-month high of 1053.14 on Monday, may fall to 990 by the year-end, he said. Yesterday, it eased 1.51 points to 1051.63.
  
  The market had risen in recent weeks, fuelled by liquidity and optimism that the worst of the global recession is over.
  
  It currently trades at 15.2 times this year's estimated earnings, up from 12 times earlier in the year, which Lee considers too expensive seeing as corporate profits may contract by 7.7 per cent this year.
  
  "While we recognise this rally may well have room to run, we believe it is beginning to look expensive relative to growth," he said.
  
  He noted that two previous bear cycles, from 1981-1985 and 1993-1998, lasted 57 and 58 months, respectively.
  
  It has now been 17 months since the present bear market began in January last year.
  
  "Those bear markets had 22 to 38 trend reversals of 5 per cent or more; we have now seen 12 since January 2008. These comparisons suggest we are, at best, half way through this bear market," Lee said.
  
  Maybank's strategy is to go for stocks in the construction and building materials sector, as well as selected consumer and high-yield stocks.
  
  Its top picks include Resorts World, Telekom Malaysia, Berjaya Sports Toto, WCT, Kinsteel and Hock Seng Lee.

I am confused.

Let's see...

• "We believe this market rally has pushed valuations to the point where growth expectations have reached implausible levels. In fact, (corporate) profits have just begun to turn down,"

Would you agree?

Don't you think a lot of stocks had rallied far too much? And what was the basis of the rally? Wasn't it the 'there are signs that the worst is over'?

And some of these companies, there are STILL recording losses for the current reported quarterly earnings.

So earnings should improve.... but when? by how much?

Let's take a random stock, Kinsteel.

Aug 2008. Quarterly rpt on consolidated results for the financial period ended 30/6/2008

Kinsteel made some 103 million. ( Good times! :D )

Nov 2008. Quarterly rpt on consolidated results for the financial period ended 30/9/2008

Kinsteel made only 57.9 million. (Bad times... coming! )

Feb 2009. Quarterly rpt on consolidated results for the financial period ended 31/12/2008

Kinsteel lost some 185 million! ( Due to falling steel prices, Kinsteel said it wrote down their inventory to reflect the plunging steel prices)

May 2009. Kinsteel announced it lost some 34.8 million. Note that there is no inventory writedown mentioned.

How?

Here we have a company that is still losing money.

Signs are there 'that the worst could be over'.

Here are some comments from a research report.

• Offer prices of inputs such as scrap and iron ore have crept up by 7-8% in the past month, alongside a slight 5% increase billet prices to USD430/t, arising from expectations of demand trickling in. While pockets of development exist in the region, particularly Vietnam, a definite road to recovery remains to be seen, given that most regional steel mills are still underutilized and saddled with high inventory levels. Price elasticity remains high and resistance from steel buyers makes the steel market intensely competitive for now.

Sounds reasonable that the worst could be over, yes?

So how is Kinsteel the stock doing?

From that screen shot, I see that back in March 20th 2009, Kinsteel traded as low as 36 sen.

Yesterday, the stock closed at 89 sen!!!!!!!!!

oO

So would you agree now with what was stated?

• "We believe this market rally has pushed valuations to the point where growth expectations have reached implausible levels. In fact, (corporate) profits have just begun to turn down,"

And would you agree..

• "While we recognise this rally may well have room to run, we believe it is beginning to look expensive relative to growth," he said.

And this is where I am confused.

Must be my flawed mindset.

Kinsteel looked like a stock that reflected what the research analyst, Andrew Lee is saying here.

And if that is so, why is Kinsteel one of its TOP PICKS?

Incredible yeah?

And the comments earlier on Kinsteel were taken from Maybank's reports. Here's the rest.

• Buy, with TP of RM1.30. There are no changes to our forecasts, which incorporate strong earnings recovery in 2010. The group’s diversified range of products will benefit from the spectrum of steel demand, starting with the construction sector recovery post-2009. Our TP of RM1.30 is based on 8x 2010 PER. Valuations continue to look attractive. Currently trading at 4.9x 2010 PER, the stock is at a discount to its domestic sector average of 5.4x and regional average of 6x.

For a stock that FLEW from 0.36 sen to 89 sen in just two months, Maybank's target price for Kinsteel is 1.30????

Ok.. all the valuations is based on 2010 earnings.

It's Maybank's research projected earnings for Kinsteel. Their estimated earnings.

And what's Maybank's estimate?

Only some 152 million!

So from my flawed understanding, Kinsteel valuation looks cheap because based on 2010 earnings (that's a 2 year estimate), Kinsteel is trading at 4.9x 2010 PER.

Of course, I guess I have to determine if the 2010 earnings is achievable or not. Let's look at Maybank's estimate.

2008, Kinsteel made some 32 million.

2009, Kinsteel is ESTIMATED to be able to make 55 million.

2010, Kinsteel earnings should FLY to 152.6 million!!!

How now my dearest beloved Brown Cow?

You reckon it is possible under current business economics? ( see Would You Have A Punt On The Steel Stocks? for reference too )

Can mah?

If possible, then Kinsteel surely has to be the TOP buy!

*whistle*

Oh... remember this is my flawed view.

Aseambankers Comments On Resort World And MGM Mirage

This morning I wrote about Resorts World Invests In MGM Mirage

I just saw Aseambankers comments on Resorts World.


As expected, Aseambankers did not even mention the poor financial health of MGM Mirage.

Aseambanker's Warning On Tenaga And Tenaga Post Massive Losses!

Published this morning: Tenaga may post RM1b quarterly loss

• Maybank Investment Bank reiterates 'hold' rating on the stock
  
  TENAGA Nasional Bhd, Malaysia’s state-run power utility, may post a quarterly loss of RM1 billion (US$280 million) after a weaker ringgit increased foreign debt costs, Maybank Investment Bank Bhd said.
  
  The Kuala Lumpur-based electricity provider, announcing results for the three months ended November 30 today, may incur foreign-exchange losses of about RM1.4 billion for the quarter, Ong Chee Ting, an analyst at Maybank, said in a report. Tenaga made RM1.51 billion in profit a year earlier.
  
  “While these losses are not immediate cash outflows to Tenaga, their enormity is likely to spook investors,” Ong said. Slowing demand for power in Malaysia in the global recession and higher average coal costs also weighed on earnings, he said.
  
  Debt denominated in foreign currencies, mostly the US dollar and the Japanese yen, accounted for almost half of Tenaga’s borrowings of 22.7 billion ringgit last fiscal year. The ringgit has lost 9.2 per cent against the dollar in the past six months and declined 23 per cent against the yen.
  
  Maybank cut its earnings forecasts for Tenaga for the years ending August 2010 and 2011 by between 22 per cent and 24 per cent. Ong reiterated his “hold” rating on the stock.
  
  At midday, Tenaga shares Tenaga was flat at RM6. - Bloomberg

Firstly Tenaga closed the day up 5 sen at 6.05!

And Tenaga just released their earnings.

It was NOT pretty!

And this what's said in the earnings notes.

As a consumer, frankly I am appalled by Tenaga's earnings.

I look at my bills and I see myself paying more than 25% increase on my monthly electrical bills. And despite consumers paying more (Tenaga's sales revenue increased by 27% compared to the corresponding quarter last financial fiscal year), this whopping losses of 944 million is simply beyond my comprehension.

Why? How? What?

Sigh!

Does Two LCCT Makes Sense?

Blogged the other day: More On Sime Darby's Labu LCCT Project.

I made the following set of comments.

• That's my point.
  
  Why can't they just make only one LCCT?
  
  To have two LCCT makes no sense at all.
  
  And to have one at Labu is even horrendous reasoning!
  
  Doesn't it defeats all logical reasoning for air travellers who seek lower air fares?
  
  How much would it take for these budget air travellers to travel to Labu to board their cheap flights? As it is, the airport at Sepang isn't too popular since it's already located so far from the city of KL. And now they want to make the LCCT at even a further location at Labu?
  
  Imagine if Labu is constructed... and nobody showed up? Not possible? Won't air travellers avoid Labu because of its location?

Aseambankers today came up with a research note on this issue.

Here is a screenshot of what they said.

GHL Reported Quarterly Losses

GHL announced its earnings. Rather bad.

Quarterly rpt on consolidated results for the financial period ended 31/12/2007

This what they said.

• For the quarter ended 31 December 2007, the Group recorded revenue of RM12.69 million, representing a decrease of approximately 24.91% as compared to RM16.90 million achieved in the preceding year’s corresponding quarter. The decrease was contributed by stiff competition in the local and regional market. The Group incurred a loss before taxation of RM3.18 million as compared to profit before taxation of RM3.62 million in the preceding year’s corresponding quarter ended 31 December 2006. The loss before taxation was contributed mainly by a significant increase in operational costs due to the extensive expansion of the group in the overseas market couple with a shift in lower profit margin sales mix which comprising mainly sales of hardware equipment, lower composition of rental revenue of EDC and software solution sales.
  
  For the year ended 31 December 2007, the Group recorded revenue of RM51.34 million, representing an increase of 7.16% as compared to RM47.91 million achieved in the preceding year’s corresponding period. The profit before taxation of the Group for the current twelve month period is RM0.47 million, which is a drop from a profit before taxation of RM9.18 million in the previous year corresponding period. The decrease in profit before taxation was contributed mainly by the increase of operational costs in line with the extensive expansion in overseas market couple with a lower profit margin sales mix comprising substantially with sales of hardware equipment, lower compositions of rental of EDC and software solution sales.

End of the good times for GHL?

What do you think?

Aseambankers Advisory on Maxis

My Dearest Moo Moo Cow,

Just got the copy of Aseambankers research report on Maxis. Asemabankers is advocating its shareholders to ACCEPT the GO.

Now if I am the minority shareholder, don't I need to reason out if the GO price valuation is justifiable? Have a look at what Aseambankers is saying.

• Binariang offers a healthy 20% premium. Binariang, made up of shareholders accounting for 59% of Maxis shares, surprised the market by offering a 20% premium to Maxis’ last done share price in an effort to take Maxis private. The now unconditional general offer (based on 59% of irrevocable acceptances by Binariang’s shareholders) hopes to attract 100% acceptances in taking Maxis private and thus de-list it.
  A historic landmark deal that should benefit shareholders. Binariang listed a slew of factors for the proposed privatization, not least the greater-thanguided investment costs required for its overseas operations. In light of these developments, Binariang is offering to relieve shareholders of the short-term uncertainty faced by Maxis – although it did not rule out re-listing Maxis in the future (with no timeline suggested).
  Accept GO. In light of the unexpectedly phenomenal amount of investments by its competitors in both the Indian and Indonesian markets over the last few months, we suspect that from a competitive standpoint, Maxis needs to bite the bullet now and review its spending plans upwards. After a 46% share price appreciation over the last 6 months, investors should accept an additional 20% premium to its current share price for a total gain of 66% in 6 months or 132% annualized, by accepting the GO.

Is anything new being said?

Nope.

I feel that it's like a recording of what CIMB had said in the news conference.

How about showing us reasoning that the VGO is actually a fair representation of Maxis valuation and potential?

Comparing the VGO price to the traded price and the IPO price makes no sense.

Maxis IPO price was based on Maxis potential back in 2002. And Maxis 2002 differs from Maxis 2007 and differs from Maxis 2008 or Maxis 2009.

VGO price versus traded price? That's a non-issue comparison.

Now have a look at the screen shot of Aseambankers financial data for Maxis.

Let's look at what Maxis had achieved in 2006.

Look at the EPS growth stated for Maxis in 2006. 24%. Now that's a fact. And the net profit actually grew some 429.7 million or some 25.7%.

Now see how Aseambankers projected Maxis growth to be in 2007. A mere 7% for fy 2007 and a mere 8.9% in fy 2008.

Now is that a fair projection?

Someone once said to me, that it's very normal that in IPO, research reports tend to display extreme optimistic projections and for privatization cases, these projections tend to turn very pessimistic!

Are we seeing the case here?

Now given the fact that India has started to contribute maiden earnings of around 180 million, surely the growth potential is far greater for Maxis?

Now if i use a simple 22% growth projection for the next two years, Maxis eps based on Aseambankers table should be 101.8 sen for fy 2007 and 124.2 sen for fy 2008.

And if ever a pe multiple of ONLY 15.6 is deemed fair for a company that has a potential growth of over 20%, then the company is worth at least rm19.30 sen.

But is it fair?

And not forgetting such valuation is TOTALLY ignored the immense operating cash flow shown currently by Maxis.

Maxis in its fy 2006 balance sheet, depreciated some 1.014 billion from its earnings.

Now this 1.014 billion is money which hadn't really vanished into thin air and neither has it gone to the money heaven. Want to try including these money into the valuation?

Yeah, rm24.00 would have been a fair value based on current data. Not a sen less!

Them Sunrise Projectiles!

My Dearest Moo Moo Cow,

Let's look at Aseambankers projections again.



Now I am extremely lucky enough to have a saved copy of OSK report on Sunrise. See, I want to put this 154.9 million into some sort of perspective.

Back in Aug 2004, OSK projected earnings of 141.7 million for Sunrise in 2006. Sunrise had that huge funky provision back for its fiscal year 2006. Anyway, current nine month year to date fy 2007, Sunrise only managed 72.7 mil.



Ok, we can say that OSK is extremely powder-full with their earnings projections as expected.

Ok that was then. In Dec 2006, OSK report projected a net profit of only around 142 million for Sunrise fy 2008. LOL!! 2 years later, OSK is still using the same projected earnings for Sunrise? See table below.



And the following table is from RHB's research report dated 18th April 2007. RHB projected Sunrise to achieve a net profit of 134.4 million for its fy 2008.



Now if you thought Aseambankers was extremely optimistic, then how about HDBS research report on 18th April? HDBS projected an earnings of 190.7 million for Sunrise's fy 2008! WOW!!!




Yeah! I know what exactly you are thinking. Tell me more about it, my dearest!

Aseambankers on Sunrise

My Dearest Moo Moo Cow,

I just on the Edge website that Aseambankers Research raises Sunrise's TP to RM4.50. I find so amusing the way the brokers raises the target price of a stock by raising the forecasted profits based on a very optimistic growth projection. Yes, the higher the expectations, the higher the target price.

Here's what written on the Edge based on that Aseambankers research report.

• Aseambankers Research has raised the target price for Sunrise Bhd from RM3.92 to RM4.50 based on 11.5 times the calendar year 2008 earnings per share, supported by its revised net asset value (RNAV) of RM4.58.
  
  Maintaining a buy on Sunrise at RM3.78 and the earnings forecasts, it said the target price was well supported by the RNAV (previously RM4.50), which incorporates surplus from the recent proposed JV development on a 3.19 acre land in Mont Kiara.
  
  "Management guided that Sunrise has no plans to develop this new JV land in the immediate future, but merely intends to secure more land due to scarcity of supply around the Mont Kiara area," Aseambankers Research said.
  
  It said Sunrise's latest nine-month net profit at RM72.7 million, which was a 15.1% rise year-on-year, was within expectations, even though it only met 61.6% of consensus' and 65.9% of its full-year estimates.
  
  Aseambankers expected Sunrise's 4QFY07 results to be stronger, backed by a strong unbilled sales of RM1.3 billion as of April 23, 2007, and the near completion of Kiara Designer Suites and Solaris Mont Kiara (MK), which should lift margins. (read here for the rest of the Edge posting. )

And I was lucky enough to get a hold of Aseambankers research report.

Sunrise latest nine-month earning is around 72.7 million. So a full year earning of around 110 mil is about fair.

However, no one values stock based on current earnings. It's all about the future earnings.

And here is where it gets funky!

And in Sunrise case, the future earnings are based on an earnings expectations of 154.9 million. See the screenshot taken of Aseambankers research report.

And that works out to roughly a growth expectation of 40.8%

How?

Now my dearest Moo Moo Cow, I am not judging the issue of Sunrise as a stock but I am just totally amazed by the incredible projections made by our local research houses. Growth projections are simply worth 10 sen a dozen!