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Saturday, July 3, 2010

KLCI Stock - MMCCORP / 2194 - 2010 Quarter 1

Market Cap : 3045058552*2.37 = 7,216,788,768.24 (Large)
NTA per share : (6774173-7970303)/3045100 = Negative
P/BV : Negative
Forecast P/E now : ( = 27.72 (High)
ROE : 2.41% (Low)
DY : 0.03/2.37*100 = 1.27% (Low)
Fixed Asset Turnover(3 year) : (0.2297+0.2463+0.2058)/3 = 0.2273 (Low)
Liquidity Ratio : 7843083/4868609 = 1.6109 (Low)
Receivables Collection Period : (2034208+2481853)/2/(8599445/365) = 95 days (Acceptable)
My Target Price : Not interested unless revenue and profit increase more
My Decision : NOT BUY
My Comment : Revenue and profit increasing but remain low, good cash flow, high debt and decreasing, navps increasing
Technical Support Price : 2.2
Risk Rating : MODERATE
OSK Target Price : 2.8 (25 Feb 10)

My notes based on 2010 Quarter 1 report (number in '000):
- The Group's profit before tax for the three-month financial period ended 31 March 2010 was higher by RM50.9 million compared to the corresponding financial period ended 31 March 2009
- Higher contribution from Transport & Logistics division by 74.7% consistent with higher throughput volume from port business following the global economic recovery
- Higher contribution from Energy & Utilities division by 18.7% mainly driven by better performance of Malakoff Corporation Berhad and higher volume gas sold by Gas Malaysia Sdn Bhd
- Lower contribution from Engineering & Construction division by 27.3% mainly attributed to lower contribution from Double Track project due to revisions in the overall margin. This was mitigated by additional contract revenue recognised from SMART project and lower share of losses from an associate, Zelan Berhad
- The Group recorded a better profit before tax in the current quarter as compared to the preceding quarter. This was mainly due to higher contribution from the energy and utilities division and the absence of provision for the impairment loss on intangible assets in an associate made in the preceding quarter
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0777*1.1 = 0.0855, estimate PE on current price 2.37 = 27.72(DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0777*1.1 = 0.0855, estimate highest/lowest PE = 29.82/25.38 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0297*4*0.9 = 0.1069, estimate highest/lowest PE = 23.43/20.63 (DPS 0.025)

MMCCORP latest news (English)


Anonymous said...

Agreed that if you purely look at the fundamentals of the company, there are many better bets out there. But, u r not factoring a few key variables in reaching ur 'Not Buy' call - > Strong political links, who the current major shareholders are, it's a CI component stock (You know lah, how the CI works ; p ). There are times when you can't just stick to the valuations and take ur picks, u gotta consider 'other' variables too.

cwyeoh stock analysis said...

Thank you for your comment.

I agree with you those 'other variables' but then those information is not that easy to find, you got any website where i can get it political links?

As major shareholders i got pay attention to whether any dispose/buy happen. My idea is when major shareholders continue buying will be good time and vice versa. As you mention who are the current major shareholders, my idea is if got those big player like EPF then i will pay extra attention. But then this area is frequent change (everyday may got dispose/buy), is hard for me to update in blog.

As CI, i will be factor in the way give higher PE.

Anonymous said...

Hi there...

Well, unfortunately, there are no website(s) where you can find such info. However, reading the major Malaysian business dailies, investment forums will help you gain such insights over time. In MMC's case, EPF, PNB, Amanah Saham, and Syed Mokhtar collectively hold a BIG chunk of the company's shares. And Syed Mokhtar's political connections are no secret ; )

Now, don't be surprised if Gamuda-MMC's MRT proposal goes through. These guys have definitely clinched some big projects in the past and who's to say that the same won't happen again? ; )

In ending, I'd like to say that MMC is a good trading buy when it falls in the 2.2x-2.3x range.


Anonymous said...


See, what did i tell you in my comment above? You can't just buy and sell based on how the financial ratios look like, especially the PE, NTA, etc. At least not if they are a CI component : D

Look at both Gamuda as well as MMC's share price today : D Gamuda is knocking on the door of 4 bucks and MMC touched 3.20 today ; )

Yes, they are trading at ridiculous valuations, but it is what it is ; )

Happy trading : )

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