Mr. Teerapat Jirapipat (middle) Managing Director, Chiang Mai Rimdoi, Co.,Ltd. (CRD), contractor for infrastructures, with all of executive team and secretary present company’s information and data to analyst and marketing teams of Globlex Securities Co., Ltd. In order to clarify the 2017 turnover and including to present the 2018 business plan. The 2018 year plan is to increasing contracts with private organizations from 15% to 60%. Welcomed and handed the souvenir by Mr. Kittipan Phusanawan (2nd from the right), Senior Managing Director and Miss Wilasinee Boonmasoongsong (right) Research Development Director at CRC Tower All Season Place recently.
Globlex Securities Co., Ltd.: recommend the appropriate buying price at 1.48 baht
2017 net profit is increasing 3% which lower than the estimate at 5%.
2017 net profit is decreasing 9% but still have 30% growth rate from last year The 1Q 2017 profit tendency should grow, comparing to the same period from last year Recommend to “buy” at the appropriate price 1.48 baht
Main Issues about Investment :
2017 net profit growing 3% which lower than the estimate 5%: net profit 4Q2017 is 14.7 millions baht +116% QoQ -4% YoY. 2017 Net profit is 43.9 millions baht +3.2% YoY 5% lower than expectation. Contractor income is 32% increasing, 1.3 billions baht. Service income is 25% decreasing, 23 millions baht due to managing and eliminating waste contract in 3Q 2017 expired.
In 2016, Government contract is increasing to 85% from 75%, which cause the net profit rate decreasing to 8.3% from 9.4%.
In 2016 the net profit was decreasing from 3.3% from 4.2% because of the increasing of the expense from raising the salary rate. Another cause was the labor compensation due to the expiration of the eliminating waste contracts in 3Q 2017. Besides, there was the extra expense in the stock market entering fee.
The company dividend per share is at 0.0415 baht, yield 3.2% XD April 3rd, paying April 24th.
2018 Net profit was estimate to decreasing 9%, but is 30% growing from last year: In 2018, overall contractor industry has a good tendency from expediting the 2018 budget. The tourism, hotel and condominium are growing continuously in Northern areas.
In 2018, the board of director has set the goal of income at 1.6 billions baht with 10% growth rate. Also, the contactor’s auction could cost around 2 billions baht. The company is seeking the opportunity to work in the CLMV, starting at Myanmar and Vietnam. At the end of 2017, the company has backlog which cost 892 millions baht. Those could be income for this year as well. At the beginning of 2018, the company got the jobs cost 105 millions baht. The board of director planed to adjust the percentage between government projects and private organization projects from 85% and 15% to be 40% and 60% instead. These adjustments would increase the profit for the beginning of the year due to the profit from private organizations projects would be valued much more than the government projects. The research department has adjust the
initial profit rate from 9.2% to 9% which cause the profit estimate in 2018 decreasing to 9%, 57 millions baht. The profit could still be 30% higher than last year.
The profit tendency in 1Q 2018 could be growing more than the last year at the same period. : The profit tendency in 1Q 2018 could be growing more than the last year at the same period which is 7.7 millions baht. However, it would be lower than 4Q 2017 which is 14.5 millions baht. Since, the projects just start and are in process. The initial profit should be 7.9% (4Q 2017), which is much more than 7.7% (1Q 2017). The company expect that the profit should be increasing in every quarter and the last quarter should gain the most profit.
Recommend to “buy” at the appropriate price 1.48 baht : Due to the net profit per share decreasing 0.11 baht from 0.124 baht per share. This price is based on the prospect PER at 13 decreasing to 1.48 baht from 1.60 baht. There will still be upside from closing price so the analyst still recommends to “buy”.
Analyst
Wilasinee Boonmasungsong
02 672-5937
wilasinee@globlex.co.th