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Tuesday, March 9, 2010

MMCCORP / 2194 - 2009 Q4

OSK TP: 2.95 (19 Jan 10)
My decison: Not BUY
Reason: Overvalue

My study based on 2009 Q4 report (number in '000):
- Contribution from Engineering & Construction division was lower, mainly due to revisions in the overall margin of the Double Track project. There were also losses from our associate, Zelan Berhad amounting to RM90.8 million for its ongoing projects in the Middle East
- Lower contribution from Transportation & Logistics division due to the impact of the depressed economic environment
- The Corporate division registered lower contribution, mainly due to an exceptional gain from the disposal of a subsidiary coupled with the negative goodwill derived from the acquisition of Aliran Ihsan Resources Berhad (“AIRB”) recognised in the previous financial year. Finance costs were higher at MMCB Company level consistent with the increase in borrowings following the acquisition of Senai Airport Terminal Services Sdn. Bhd. in the current financial year
- Improvement from the Energy & Utilities division, mainly driven by better performance of Malakoff Corporation Berhad. Results from this division was also better due to consolidation of full year results of AIRB as opposed to only two months in the previous year
- Compare to preceding quarter, lower contribution from the energy and utilities division as a result of the provision for the impairment loss on intangible assets of an associate made
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0354*4 = 0.1416, estimate PE on current price 2.49 = 17.25(DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.035*4 = 0.14, estimate highest/lowest PE = 17.89/15.75 (DPS 0.025)
- No estimate next 4Q eps after 2009 Q2 result announced
- No estimate next 4Q eps after 2009 Q1 result announced

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