Cypark: Seasonally Stronger Earnings Recorded

Result Update

For QE31/10/2016, Cypark's net profit dropped 11% q-o-q but rose 46% y-o-y to RM12 million while revenue dropped 4% q-o-q but rose 21% y-o-y to RM68 million. Revenue dropped q-o-q mainly due to the lower income from landscaping and infrastructure project in current quarter. PBT also dropped q-o-q mainly due to the additional provision for rectification costs made for environmental engineering projects in current quarter.


 Table: Cypark's last 8 quarterly results


Graph: Cypark's last 25 quarterly results

Prospect

PublicInvest Research expects Cypark's earnings to improve in FY2018, coming from additional 20MW biomass and 5MW biogas income due to the completion of its Ladang Tanah Merah project in Negeri Sembilan by late 2017. This project will generate additional revenue of RM65 million and profits of RM15 million to the group. For more, go here.

Valuation

Cypark (closed at RM2.10 yesterday) is now trading at a PE of 10 times (based on last 4 quarters' EPS of 20.33 sen). At this multiple, Cypark is deemed fairly attractive.

Technical Outlook

Cypark is in a uptrend line with support at RM2.10.


Chart: Cypark's weekly chart as at Jan 5, 2017 (Source: Tradesignum)

Conclusion

Despite the good financial performance, attractive valuation & positive technical outlook, Cypark is still rated a BUY.

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.