Rotary Engineering

Re: Rotary Engineering

Postby winston » Wed Jul 29, 2009 11:10 am

No, no interest in Engineering companies with small margins.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Rotary Engineering

Postby winston » Thu Jul 30, 2009 3:36 pm

Not vested. From CIMB:-

Rotary Engineering (S$0.87) - In the company of giants

The recent award of a US$745m Jubail export refinery tank farm contract to Rotary has catapulted it into the big league. This is the largest single contract won by any Singapore private-sector company. Rotary now stands in the company of global EPC players. Our earlier gross margin assumptions were too conservative, given the volume of overseas contracts.

Also, Rotary has the only fabrication facility in Jubail, which should give it a monopoly over fabrication work during the development of the refinery. Maintain Outperform. Our target price has been raised to S$1.39 from S$0.90, following our earnings upgrade of 24.5-66.3% for
FY09-11, to factor in higher revenue and margin assumptions.

Our target price remains based on 11x CY10 P/E, its 5-year average P/E. Rotary’s CY10 P/E stands at 6.8x, still at a steep discount to regional peers.

( Wonder what would the margins be on the project ? Winning aproject is one thing. Making money is another )
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Rotary Engineering

Postby Aspellian » Thu Jul 30, 2009 3:41 pm

winston wrote:Not vested. From CIMB:-

Rotary Engineering (S$0.87) - In the company of giants

The recent award of a US$745m Jubail export refinery tank farm contract to Rotary has catapulted it into the big league. This is the largest single contract won by any Singapore private-sector company. Rotary now stands in the company of global EPC players. Our earlier gross margin assumptions were too conservative, given the volume of overseas contracts.

Also, Rotary has the only fabrication facility in Jubail, which should give it a monopoly over fabrication work during the development of the refinery. Maintain Outperform. Our target price has been raised to S$1.39 from S$0.90, following our earnings upgrade of 24.5-66.3% for
FY09-11, to factor in higher revenue and margin assumptions.

Our target price remains based on 11x CY10 P/E, its 5-year average P/E. Rotary’s CY10 P/E stands at 6.8x, still at a steep discount to regional peers.

( Wonder what would the margins be on the project ? Winning aproject is one thing. Making money is another )


Alot of times - stocks cheong because of the huge potential of future prospects that captures investors' imagination (note the significance of the highlighted words!). When actual results come out - even if it meets the expectation, prices will drop. So do not worry too much about actual results (which is 2-3 years away anyway)

A pity i didnt buy when i first notice this co. there will be another opportunity. ;)

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Re: Rotary Engineering

Postby Aspellian » Mon Aug 03, 2009 11:06 am

some hindsight review / NAR (or simply No Action Review) :cry:
<aka crying over milk i didnt buy> ;) :

1) Rotary's share price is strong even when market rally under pressure. shows signs of accumulation by investors. so naturally when bull is let out of the gantry, price will cheong as bull runs wild!! :lol:
2) when sentiments improve, analysts all go about upgrading their recommendations. no different for Rotary - a high growth stock
3) sexy growth story always sells!
4) when share price breaks out of pivot point on high vol - buy
5) when share price broke above psychological barrier points eg. $0.80, $0.90, magical $1.00 - buy on way up
6) multi-baggers are made during uptrend - fullstop/no arguements


great experience for the future! future is bright for all! :lol:

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Re: Rotary Engineering

Postby Musicwhiz » Mon Aug 03, 2009 11:15 am

Just a note: as market price increases, so does risk due to the lowering of margin of safety. :P
Please visit my value investing blog at http://sgmusicwhiz.blogspot.com
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Re: Rotary Engineering

Postby Aspellian » Mon Aug 03, 2009 11:32 am

remember to invest with patience, passion and peace. Feel rich and prosperous and be wealthy!
:D :lol: :) ;) :P
Last edited by Aspellian on Wed Oct 21, 2009 2:03 pm, edited 1 time in total.

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Re: Rotary Engineering

Postby Musicwhiz » Mon Aug 03, 2009 11:36 am

Well I don't purchase shares in companies to ride roller-coasters either. If I wanted that I'd go to Genting. :lol:

Point is that at the end of the day, we can get a decent return on our money consistently. As long as I can achieve that, I'd say my aim in investing has been fulfilled ! :D
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Re: Rotary Engineering

Postby winston » Mon Aug 03, 2009 5:49 pm

Dear All,

I've split out the various discussions on value investing and filed them in the "Value Investing" thread, located in the "Other Investments Ideas" section.

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Rotary Engineering

Postby Aspellian » Mon Aug 03, 2009 6:01 pm

winston wrote:Dear All,

I've split out the various discussions on value investing and filed them in the "Value Investing" thread, located in the "Other Investments Ideas" section.

Take care,
Winston


tks Winston, sorry for going off-tangent. will be more mindful in future. :oops:

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Re: Rotary Engineering

Postby Aspellian » Wed Aug 05, 2009 12:10 pm

Mainboard-listed Rotary Engineering has registered record half-year revenues of $296 million in its half yearly results for the period ended 30 June 2009, up 18% y-o-y from $251.7 million.

Profit after tax and minority interest (PATMI) was $17.4 million, a y-o-y decrease of 21% from the $21.9 million.
The decline in profit was due in part to higher operating costs, says the provider of engineering, procurement, construction and maintenance services specialising in the oil-and-gas industry.

For the period under review, Rotary’s gross profit margin remained stable at about 20% and earnings per share stood at 3.1 cents for the first half of fiscal 2009 compared to 3.9 cents in the previous corresponding period.

Quarter-on-quarter, Rotary recorded a 22% rise in revenue, from $134.6 million to $164.2 million. The higher turnover was due mainly to the recognition of revenue from several key projects that are nearing completion as scheduled.

The group registered a PATMI of $13 million, an increase of 11% over the $11.8 million registered in the last corresponding quarter.

In the second quarter of FY2009, Rotary says the lion’s share of the group’s revenue – about 71% — was derived from Singapore, with 19% contributed by the Asean countries and 11% by activities in other markets. Going forward, Rotary’s operations in Saudi Arabia are likely to contribute significantly to its revenues, in the light of its recent win and its intention to capitalise on its presence in that market.

The group’s financial position also remains sturdy with total assets of $421.7 million, net tangible assets of $217.0 million and a net cash position of $110.9 million. Its market capitalisation was $636 million, based on the closing price of $1.12 as at Aug 4.

Shareholders’ equity of $210.1 million showed an increase of 2.7% or $5.6 million higher than that recorded on Dec 31, 2008. Net asset value per share remained stable at about 37.0 cents for the period under review. Its positive net working capital stood at $116.1 million.

Rotary also says the group incurred a foreign exchange loss of $3.3 million due to the weakening of the US$ against the S$ during the three months ended June 30, 2009.
Notwithstanding, 1H2009 pretax profit rose 236% to $14.2 million while net profit increased by $8.1 million to $11.5 million, up 233%.

Annualised Return on Equity for 1H2009 was a robust 33.4%.

The group’s overall cash position was further enhanced by improved collections of trade receivables which decreased by $23.9 million, the company says.

Net operating cash flow generated was $35.2 million in 1H2009 while available cash and cash equivalents stood at $63 million as at June 30, 2009, almost double the $31.1 million as at Dec 31 2008.

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