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Bina Puri Holdings - 2Q10 results within expectations
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By KENANGA RESEARCH
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Tuesday, 24 August 2010 11:29 |
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Bina Puri Holdings
2Q10 results within expectations
• 1H10 net profit of RM5.5m came in 31% of our forecast, however, after excluding LCCT contract, the 1H10 net profit came in slightly higher than our forecast at 55%. Bina Puri’s revenue jumped 76.2% on higher billing and contract secured in the late FY09 and its net profit inched up by significant 113% supported by improving net margin from 0.8% to 1%. The revenue from LCCT project will only be recognised in 2H10 with the big chunk of it in the 4Q10.
• YoY, higher revenue by 44% on the back of higher order book. As at 1H10, the order book stood at RM2.3b to last for the next 3 years. These contracts comprise local projects and overseas projects in Brunei, Thailand and Pakistan. The net profit margin shown some improvement 1.3% from 0.8% as the building materials prices are stable. Its property and polyol segment performance continues to be loss making while other divisions are improving.
• QoQ, net profit soars 81% as net margin improves. Despite of lower construction revenue, the Group’s net profit grew 81% supported by higher construction margin and higher sales for its quarry division. The quarry division has been improving since previous quarters which inline with the growing construction contract.
• Order book remains healthy at RM2.5b for the next 3 years. Construction division still the main contributor for Bina Puri especially after the LCCT contract was secured in July 2010. The contribution will only materialise in 4Q10 which we expect the margin could be around 5% to 6%. On the overseas front, the Group is eyeing projects in Saudi Arabia which is still at preliminary stage, following the construction license award in Saudi Arabia.
• More steady income from KLS highway in 1Q11. The Kuala Lumpur- Kuala Selangor Ekspressway (KLS) is expected to be fully operational in 1Q11 as currently undergoing trial basis. This will add some stable recurring earnings to Bina Puri which we are not yet factored in to our forecast.
• Maintain BUY with unchanged TP of RM1.77 based on 10x PE FY10.
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