AZRB

AZRB

Postby winston » Thu Sep 11, 2014 7:04 pm

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AZRB worth double its value: CIMB Research
September 8, 2014

KUALA LUMPUR: CIMB Equities Research estimates Ahmad Zaki Resources Bhd (AZRB), with its last traded price at 72 sen, is worth double its value today.

“The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled year-to-date,” it said on Monday.

CIMB Research said for AZRB, it applied a 50% discount to AZRB's RNAV/share of RM2.95.

“The 50% discount is fair in our view and it is higher than the 10%-40% we apply to the construction stocks under our coverage. We arrive at an implied value of RM1.48 a share, which implies an upside of 103%,” it said.

CIMB Research said based on its estimates, the stock is worth double its value. The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled YTD.

“AZRB's business structure is similar to the likes of Gamuda and IJM Corp i.e. an order book-driven construction earnings, backed by stable and predictable earnings from property development, with more lucrative margins coming from other segments like its oil & gas bunkering facilities. There are also inherent values from its property and plantation land banks.

“Construction and oil & gas are the two major profit generators for AZRB, with contributions coming in at an equal split,” said the research house.

Source: the Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:09 pm

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Construction unit boosts AZRB Q1 earnings
May 27, 2014

KUALA LUMPUR: Ahmad Zaki Resources Bhd's (AZRB) earnings jumped 82.3% to RM4.48mil in the first quarter ended March 31, 2014 from RM2.45mil a year ago due to better margin projects under its construction division.

It said on Tuesday its revenue increased by 9.6% to RM153.79mil from RM140.24mil. Earnings per share were 1.62 sen compared with 0.89 sen.

"Overall, the balance order book in construction division stood at RM2.032bil," it said.

AZRB said the order book mainly comprised completion of the remaining works of Lebuhraya Pantai Timur Project, Phase 2, Terengganu (RM48mil), proposed development of International Islamic University Malaysia Teaching Hospital in Kuantan, Pahang through the Private Finance Initiative (RM296mil).

The other projects were Projek Mass Rapid Transit Lembah Kelang: Jajaran Sungai Buloh-Kajang for the Package V6 construction and completion of Viaduct Guideway and other associated works from Plaza Phoenix to Bandar Tun Hussein Onn Station (RM413mil).

It was also upgrading the existing 35 storey office blocks and reconstruction of new 56 storey hotel tower at Lot 1194, Jalan Sultan Ismail in Kuala Lumpur for Permodalan Nasional Bhd (RM649mil).

It was also awarded Package 2A to construct the 1,130 million litres per day Langat 2 water treatment plant (RM298mil or 30% of joint venture).

Source: The Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:15 pm

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March 3, 2014

RHB Research said for AZRB, the plantations segment was still a drag in FY13. However, it maintained its Buy call, forecasts and RM1.33 fair value.

"Its FY13 results missed expectations largely due to wider-than-expected plantation losses.

The company is a good small-cap proxy to the buoyant construction sector in Malaysia.

We also like Ahmad Zaki for its concession assets (bunkering, a university and a toll road) and oil palm plantations in Indonesia," it said.

Source: The Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:18 pm

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AZRB FY13 earnings hurt by losses in plantations, write-offs
February 28, 2014

KUALA LUMPUR: Ahmad Zaki Resources Bhd (AZRB) earnings fell 69.5% to RM5.69mil in the financial year ended Dec 31, 2013 (FY13) compared with FY12's earnings of RM18.68mil, mainly due to losses from the plantation division and further write-off of non-recoverable receivables.

It said on Friday its FY13 pre-tax profit fell 55.5% or RM21mil to RM16.80mil from RM37.77mil.

Its revenue fell 13.3% to RM584.97mil from RM674.65mil mainly due to lower revenue derived from the construction division.

AZRB said its Q4 FY13 earnings were at RM503,000 only, which was down 39.3% from RRM829,000 a year ago. Revenue was RM120.50mil, or down 24.9% from RM160.63mil while earnings per share were 0.18 sen compared with 0.30 sen.

The company said its order book in the construction division was RM1.84bil, comprising of the Kerja Raya 2 complex along Jalan Sultan Salahuddin in Kuala Lumpur (RM14mil), completion of the remaining works of Lebuhraya Pantai Timur Project, Phase 2, Terengganu (RM65mil) and the International Islamic University Malaysia Teaching Hospital in Kuantan via the Private Finance Initiative (RM327mil).

Its order book included the Mass Rapid Transit, Sungai Buloh-Kajang Package V6 construction and completion of viaduct guideway and other associated works from Plaza Phoenix to Bandar Tun Hussein Onn station (RM452mil).

It is also upgrading existing 35 storey office blocks and reconstruction of new 56 storey hotel tower at Lot 1194, Jalan Sultan Ismail, for Permodalan Nasional Bhd (RM652mil).

Source: The Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:28 pm

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AZRB corporate exercise fails to excite investors
January 16, 2014

KUALA LUMPUR: Ahmad Zaki Resources Bhd’s (AZRB) proposed corporate exercise failed to excite investors and saw the share price falling to a low of 83 sen in relatively active trade amid a cautious market sentiment.

At 12.30pm, it was down seven sen to 84 sen. There were 1.95 million shares done at prices ranging from 83 sen to 89.5 sen.

The FBM KLCI fell 9.3 points to 1,814.73. Turnover was 972.94 million shares valued at RM956.87mil. The broader market was weaker with decliners beating advancers more than two to one or 475 losers to 209 gainers.

AZRB had proposed a six-for-eight rights issue. The rights issue price of 50 sen translates to a 32% discount to the last closing price on an ex-rights basis.

“This will raise RM103m which will largely be used to fund AZRB’s equity contribution for the East Klang Valley Expressway (EKVE). Proforma net gearing would be reduced from 79% to 21% ex rights and FY14-15 EPS diluted by 36%-43%. Maintain BUY with revised TP of RM0.89 on an ex-rights basis,” said Alliance Research.

The corporate exercise involves:-
(1) a par value reduction from 50 sen to 25 sen,
(ii) renounceable rights issue of up to 207.7 million new shares on a basis of six rights shares for eight existing AZRB shares held,
(iii) free detachable warrants on the basis of one warrant for every two rights shares, and
(iv) establishment of an employee’s share scheme of up to 15% of the issued share capital of AZRB.

The rights issue price has been fixed at 50 sen. This translates to a discount of 31.6% to Wednesday’s closing price of 91 sen on an ex-rights basis 73 sen.

Meanwhile, RHB Research has maintained its Buy call on AZRB with a fair value of RM1.33, saying it likes the company for its concession assets and oil palm plantation in Indonesia.

In a note on Thursday, RHB said AZRB is a good small-cap proxy to the local construction sector, with strong prospects underpinned by an extended upcycle driven by the RM73bil Klang Valley MRT project.

Source: The Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:31 pm

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Alliance Research maintains Buy on AZRB
January 16, 2014

KUALA LUMPUR: Alliance Research is maintaining a Buy rating on Ahmad Zakri Resources Bhd (AZRB) following its corporate exercise.

AZRB had on Wednesday announced a six-for-eight rights issue. The rights issue price of 50 sen translates to a 32% discount to the last closing price on an ex-rights basis.

“This will raise RM103m which will largely be used to fund AZRB’s equity contribution for the East Klang Valley Expressway (EKVE). Proforma net gearing would be reduced from 79% to 21% ex rights and FY14-15 EPS diluted by 36%-43%. Maintain BUY with revised TP of RM0.89 on an ex-rights basis,” said the research house on Thursday.

The corporate exercise involves a par value reduction from 50 sen to 25 sen, (ii) renounceable rights issue of up to 207.7 million new shares on a basis of six rights shares for eight existing AZRB shares held, (iii) free detachable warrants on the basis of one warrant for every two rights shares, and (iv) establishment of an employee’s share scheme of up to 15% of the issued share capital of AZRB.

The rights issue price has been fixed at 50 sen. This translates to a discount of 31.6% to Wednesday’s closing price of 91 sen on an ex-rights basis 73 sen.

“Based on the current share base (ex-treasury shares), we estimate that the rights issue will bring about 206.6m new shares and raise RM103.3m in cash proceeds.

“RM75mil of the proceeds will be used to fund the equity contribution for the EKVE concession. Construction cost of the EKVE is RM1.55bil. RM15mil of the proceeds will be used to repay borrowings and the remaining RM13.3mil for working capital and estimated expenses for the rights issue,” it said.

Alliance Research said based on its 3QFY13 financial results, AZRB’s net gearing stands at 79.4%. Post rights issue, proforma net gearing is expected to be reduced to 21.1%.

“We maintain our BUY rating on AZRB. Our ex rights TP of 89 sen offers 22.3% upside to the last closing price on an ex rights basis (73 sen).

“At our ex-rights TP, the implied P/E for FY14-15 is 17.4 times and 11.3 times. While this may appear slightly expensive, one must bear in mind of AZRB’s valuable asset base which has yet to be earnings accretive such as the Kalimantan plantation land and the EKVE concession,” it said.

Source: The Star
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Re: AZRB

Postby winston » Thu Sep 11, 2014 7:35 pm

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RHB Research maintains Buy on Ahmad Zaki Resources
July 30, 2013

KUALA LUMPUR: RHB Research is maintaining its Buy call on Ahmad Zaki Resources Bhd (AZRB) with a fair value of RM1.47 after it won a suit over a contract dispute in Saudi Arabia and was awarded RM79.6mil.

The research house said on Tuesday that due to improved sentiment post the 13th General Election, it saw sustained interest in small-cap construction stocks.

“We also like Ahmad Zaki’s defensive non-construction businesses such as bunkering and plantations,” it said.

To recap, Paris-based International arbitrator, International Chamber of Commerce, ordered Alfaisal University/King Faisal Foundation to pay AZRB RM79.6mil over the latter’s claims in an arbitration case involving a construction contract for Phases 1 & 2 of Alfaisal University Campus in Riyadh, Saudi Arabia.

RHB Research described the award as good news for AZRB as the company could now write back the entire amount as an exceptional gain, which will translate into 29 sen per share.

“When the contract ended in dispute in FY10, AZRB bit the bullet by making full provisions for additional costs incurred by the project amounting to RM93.6mil in its FY10 accounts. This resulted in a record net loss of RM61.6mil for that year.

“We maintain our estimates as we exclude one-off items in our forecasts and await full settlement of the award. Assuming the award is paid, the RM79.6mil cash inflow will significantly reduce AZRB’s net debt and gearing of RM109.5mil and 0.52 times respectively as at March 31, 2013 to RM29.9mil and 0.1 times,” said RHB Research.

The research house said it liked AZRB’s strong earnings visibility, backed by its RM2.2bil-strong outstanding construction orderbook as well as two lucrative concessions with a minimum project IRR of 8% in the RM413mil International Islamic University Malaysia (IIUM) campus in Kuantan now under construction, and the RM1.55bil East Klang Valley Expressway (EKVE), which is pending financial close.

“Upon financial close, the EKVE will generate about RM1.5bil worth of internal construction works for AZRB, as well as substantially boost its outstanding construction orderbook to RM3.7bil,” it said.

Source: The Star
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