Kumpulan Perangsang Selangor 3QFY08: Mixed results

December 10, 2008 at 7:38 am Leave a comment

• Quarterly revenue improving
KPS 3Q08 revenue came in at RM71.1m (-18.2% y-o-y, +4.8%q-o-q), bringing it’s total revenue to date to RM236.8m, 12.9% lower than the revenue recorded in the same period last year. The YTD revenue has come in at 60% of our FY08 forecast. The decrease in revenue was mainly due to lower revenue recorded for the current quarter by the property development sector of RM18.61m.
• But quarterly net profit fell
The group recorded a 3Q08 PBT of RM20.1m (+82.5% y-o-y, -22.8% q-oq) and net profit of RM17.5m (+587.9% y-o-y, -37.4% q-o-q). The higher yo-y results were mainly due to higher profit recorded by infrastructure and utilities sector as compared to 3Q07.
The lower q-o-q results were due to lower profits from the property development, hospitality, golf and recreational services and investment holding sectors.
• Moving forward
Management has stated that they expect the infrastructure and utilities sector to continue to be profitable moving forward. However there are indications that the property development sector will be continue to be challenging due to the current global financial conditions.
• Buy call with a TP of RM2.10
As before, the results itself are unexciting. However, it may not reflect the true value of the company once the water rationalisation programme takes off. Though little has been said about the programme, KPS seems confident that the programme will go ahead by the end of the year. We maintain our TP of RM2.10 based on the prospects of the rationalisation programme and upgrade our call to a BUY.

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