SYF (7082) - The forgotten small cap and also the laggard property stock!
Why do investors want to go chasing after loss-making company like GSB (as a Group) while you can get a better one like SYF Resources (as a Group). Both companies also involve in property development.
I am sure this stock is better than GSB!
If you really want to bet on the laggard property-related stock, I think I'd prefer SYF Resources because its revenue and operating size from this segment is far bigger than the other one. It means property development of SYF Resources has been well established and its margin about the same and reasonable during this slowdown property market.
Source: Bursa Malaysia
SYF Resources's 1HFY17 Results
Source: Bursa Malaysia
SYF Resources has also been doing business in rubberwood furniture and boards, which are in profitable position.
------------------------------------------------------------------------------------------------------------------------------------------
The venture into property development will prove to be fruitful of diversification, which strong earnings from property segment will offsett its export business contribution given that it may be flattish for 3QFY17 results due to ringgit has been stabilising around MYR4.40-MYR4.43.
To the fact that although ringgit has now stabilised, there is not much difference average 3-month MYR between 2QFY17 results and 3QFY17-to date results. This is because in 2QFY17, MYR started from low base of MYR4.20 to high of MYR 4.49, resulting similar average MYR with 3QFY17 to date, which has been maintaing at level of MYR 4.40 and above.
Therefore, we could still expect higher Year on Year value of revenue and earnings from this export business segment (provided volume remains the same or higher) even though flattish quarter-on-quarter.
Going forward, I assume that Board segment will be boosted in FY18 earnings as MDF plant in Simpang Pertang will be fully comissioned.
To do forecast based on simple math, we can just annualised its FY17 segment earnings. We would get RM16 million and RM5 million for furniture and board segments respectively.
-------------------------------------------------------------------------------------------------------------------------------------------
For 2HFY17 as well, its property development earnings will continue to supported by its Kiara Plaza and Lavender Residence. It has realised strong take-up rate, which in turn strong earnings so far from this segment.
If you annualised its earnings, we would get FY17 earnings from property development of RM24.98 million or 4sen per share (26%YoY) (from FY16 of RM19.8 million or 3sen per share).
It will even be boosted by the launching of IRIS residences (condominium) project in Sungai Long in 2H2017, which will translate into higher FY18 earnings.
-------------------------------------------------------------------------------------------------------------------------------------------
Sum all, we would get annualised FY17 earnings of RM45.98 million or 7.4sen per share.
So, its target price?
My opinion, for safe play, we can peg annualised FY17 EPS of 7.4sen by 10x PER, which translate it into target price of 74sen.
For hot market, it may goes up to 13-15x PER, which translate it into target price of 96sen-RM1.11.
In a nutshell, I hope investors now know to differentiate which one is diamond, which one is not! I believe it still got upside despite recent price rally. It is just a beginning! I dont think it will go down below 60sen anymore. The downtrend is over!
SYF (7082) - The forgotten small cap and also the laggard property stock!
http://klse.i3investor.com/blogs/glorystocks/120978.jsp
