Stocks In Focus MY (Cypark Resources, Eco World, Signature Int’l) – 22/04/15
22 April 2015
Cypark Lanfill Project To Add Rm2b To Revenue
Cypark Resources expects its waste-to-energy (WTE) project in Ladang Tanah Merah Negri Sembilan, to generate RM2 billion in revenue over the 25-year concession period.
While small parts of revenue will be recognised progressively in the construction phase, the project’s full revenue recognition will be starting in 2017 when all phases of the project are completed.
The group plans to partly fund the WTE project using proceeds from a private placement of up to 41 million new Cypark shares, representing 20 percent of its share capital, subjected to the approval of shareholders on an extraordinary general meeting to be held on 6 May.
Significance: The WTE project is expected to generate recurring income for the group. Going forward, Cypark hopes to maintain its current revenue growth level of above 10 percent for the year and will look to build assets to generate concessionaire income, which is more recession-resilient and with lesser foreign exchange risks.
Eco World To Develop RM10b GDV Eco Marina
Eco World Development Group has agreed to take on the development of the Eco Marina project in Batu Kawan, Penang with a potential gross development value (GDV) of RM10 billion. The mixed development project will include an 18-hole golf course spread over 449.6 acres of leasehold land.
The land comprises of 299.6 acres 99-year development parcel worth RM730.9 million and another 150 acres of land to be leased for 30 years for RM65.3 million (with an option for renewal for a further 30 years) that will be used to develop the golf course and club house.
The group noted that Batu Kawan is set to become the third satellite town of Penang due to its strategic location and close proximity to the Second Penang Bridge and is poised to draw a wide and varied pool of investment across various sectors through the development of a 150-acre small and medium enterprises Village in the area.
Significance: The estimated RM10 billion GDV will be over a development period of 10 year. Separately, Kenanga Investment Research has kept its ‘Outperform’ call on the stock with a target price of RM2.05 and notes that significant earnings impact from the new project will likely be from FY18 onwards as its expected launch is in FY17.
Signature Eyes More Contracts
Kitchen and wardrobe manufacturer Signature International is hoping to win more contracts this year, with the increase in the supply of residential property in the country.
The firm’s current order book stands at RM160 million and it said that it has felt some impact from the incoming supply of residential property boosting kitchen systems sales, with a 86.5 percent surge in revenue in 1H15.
Revenue from its current order book will be recognised in FY16 and FY17. In the meanwhile, TA Securities noted that the group’s tender book has hit a record level of RM400 million, which can be used to replenish its order book, given the tender success rate of 50percent to 60 percent.
Significance: TA Securities projects the Signature’s core profit to surpass RM30 million to between RM32.5 million and RM38.8mil for FY15 to FY18, premised on the projected revenue surpassing RM200 million for the first time in FY15 and sustaining the level in the future years. It added that the firm yields relatively high margins compared to its peers due to its business model that requires minimal capital expenditure.
http://www.sharesinv.com
22 April 2015
Cypark Lanfill Project To Add Rm2b To Revenue
Cypark Resources expects its waste-to-energy (WTE) project in Ladang Tanah Merah Negri Sembilan, to generate RM2 billion in revenue over the 25-year concession period.
While small parts of revenue will be recognised progressively in the construction phase, the project’s full revenue recognition will be starting in 2017 when all phases of the project are completed.
The group plans to partly fund the WTE project using proceeds from a private placement of up to 41 million new Cypark shares, representing 20 percent of its share capital, subjected to the approval of shareholders on an extraordinary general meeting to be held on 6 May.
Significance: The WTE project is expected to generate recurring income for the group. Going forward, Cypark hopes to maintain its current revenue growth level of above 10 percent for the year and will look to build assets to generate concessionaire income, which is more recession-resilient and with lesser foreign exchange risks.
Eco World To Develop RM10b GDV Eco Marina
Eco World Development Group has agreed to take on the development of the Eco Marina project in Batu Kawan, Penang with a potential gross development value (GDV) of RM10 billion. The mixed development project will include an 18-hole golf course spread over 449.6 acres of leasehold land.
The land comprises of 299.6 acres 99-year development parcel worth RM730.9 million and another 150 acres of land to be leased for 30 years for RM65.3 million (with an option for renewal for a further 30 years) that will be used to develop the golf course and club house.
The group noted that Batu Kawan is set to become the third satellite town of Penang due to its strategic location and close proximity to the Second Penang Bridge and is poised to draw a wide and varied pool of investment across various sectors through the development of a 150-acre small and medium enterprises Village in the area.
Significance: The estimated RM10 billion GDV will be over a development period of 10 year. Separately, Kenanga Investment Research has kept its ‘Outperform’ call on the stock with a target price of RM2.05 and notes that significant earnings impact from the new project will likely be from FY18 onwards as its expected launch is in FY17.
Signature Eyes More Contracts
Kitchen and wardrobe manufacturer Signature International is hoping to win more contracts this year, with the increase in the supply of residential property in the country.
The firm’s current order book stands at RM160 million and it said that it has felt some impact from the incoming supply of residential property boosting kitchen systems sales, with a 86.5 percent surge in revenue in 1H15.
Revenue from its current order book will be recognised in FY16 and FY17. In the meanwhile, TA Securities noted that the group’s tender book has hit a record level of RM400 million, which can be used to replenish its order book, given the tender success rate of 50percent to 60 percent.
Significance: TA Securities projects the Signature’s core profit to surpass RM30 million to between RM32.5 million and RM38.8mil for FY15 to FY18, premised on the projected revenue surpassing RM200 million for the first time in FY15 and sustaining the level in the future years. It added that the firm yields relatively high margins compared to its peers due to its business model that requires minimal capital expenditure.
http://www.sharesinv.com
