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!