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Monday, February 27, 2017

CMSB: Profit Continued To Rise

Results Update

For QE31/12/2016, CMSB's net profit rose 73% q-o-q or 30% y-o-y to RM102 million while revenue was mixed, up 26% q-o-q but down 11% y-o-y to RM450 million. The divisions that reported higher PBT q-o-q were the Construction Materials & Trading, Construction & Road Maintenance, Property Development and the Others Divisions. Share of joint ventures’ results also improved almost by threefold. The Property Development Division reported a higher PBT in the current quarter due to the profit recognition from a land sale. The ‘Others’ Division recorded a higher PBT from the profit recognition from a land sale and foreign exchange difference in the current quarter.


Table: CMSB's last 8 quarters' P&L


Graph: CMSB's last 14 quarters' P&L

Valuation

CMSB (closed at RM4.10 last Friday) has a PER multiple of 26 times (based the last 4 quarters' EPS of 15.76 sen). However, if CMSB can maintain its earning similar to what it had achieved in the last 2 quarters, then CMSB's full-year EPS would be about 30 sen. This will lower its PER to about 14 times. At a PER of 14 times, CMSB is deemed fairly attractive.

Technical Outlook

CMSB broke above its intermediate downtrend line, RR and the horizontal line at RM4.00 about 6 weeks ago. Coupled with its MACD going above the zero line, we can conclude that CMSB is now in an uptrend.


Chart: CMSB's weekly chart as at Feb 24, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, exciting prospect, fairly attractive valuation and positive technical outlook, CMSB could be a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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