Every business has a price - Just like the old Mao saying - irregardless of the colour of the cat, the ones that catches the mice will be the top cat. In this instance, if Boustead ended with the media speculated stake in the Sarawak smelter, then the initial stake in OMH may just be a important step in moving into a lucrative business. Moreover, Boustead is not buying into a miner when commodity prices (manganese in this case) is red hot and OMH is trading at steep premium to book value. Hence, whether it is a good or bad move, only time will tell.
As for Boustead's long term earnings target, I remembered FF Wong was quoted in a media interview that it was his aim to one day see Boustead achieving S$100m in net earnings. How and when that milestone will be reached is certainly dependent on the business strategies that is being rolled out. Akan Datang is the infamous Malayu word.
Boustead 3rd quarter result is out!
All result red.
A drop of 39% in revenue and 57% in net profit.
Cause:
1. Mainly due to late start up of projects
2. Flood in Thailand.
3. Do take note that The Group’s revenue is derived largely from project-oriented businesses and as such, quarterly results would not accurately reflect the full-year’s performance.
No dividend declare.
But...
1. The Group’s current order book backlog stands at $300 million.
2. The Group possesses agreements for committed sales of $93 million in property assets, which are expected to be completed in FY2013 and FY2014.
Will there be a panic to sell off?
(13-02-2012, 11:49 PM)VIChris Wrote: [ -> ]Boustead 3rd quarter result is out!
All result red.
A drop of 39% in revenue and 57% in net profit.
Cause:
1. Mainly due to late start up of projects
2. Flood in Thailand.
3. Do take note that The Group’s revenue is derived largely from project-oriented businesses and as such, quarterly results would not accurately reflect the full-year’s performance.
No dividend declare.
But...
1. The Group’s current order book backlog stands at $300 million.
2. The Group possesses agreements for committed sales of $93 million in property assets, which are expected to be completed in FY2013 and FY2014.
Will there be a panic to sell off?
Boustead has never declared a dividend for 1Q and 3Q; it's always been 1H and FY results (interim and final/special) FYI.
As with any business, and especially one with a contract-type order book, one should reasonably expect "lumpy" revenues and earnings. I am not too concerned with the profit drop as I can see that the Balance Sheet is still healthy, and cash flows are strong (note that there is an increase in investment properties though, as part of the DB&L portfolio buildup). Geo-Spatial, Boustead's cash cow, has also improved revenues by +14% and PBT for 3Q by +8%.
There is reasonable expectation that the OMH investment will be approved at OMH's upcoming AGM, and Boustead can then sink in the S$23.3 million to get their 8.6% stake. The latest issue of The Edge Singapore has a write-up on OMH's Sarawak Project, and I plan to grab a copy of it to read.
Let's wait for the FY 2012 results come May 2012. I am expecting the usual 2c/share final dividend, and depending on the strength of cash flows, there may also be a surprise special dividend!
(13-02-2012, 11:58 PM)Musicwhiz Wrote: [ -> ] (13-02-2012, 11:49 PM)VIChris Wrote: [ -> ]Boustead 3rd quarter result is out!
All result red.
A drop of 39% in revenue and 57% in net profit.
Cause:
1. Mainly due to late start up of projects
2. Flood in Thailand.
3. Do take note that The Group’s revenue is derived largely from project-oriented businesses and as such, quarterly results would not accurately reflect the full-year’s performance.
No dividend declare.
But...
1. The Group’s current order book backlog stands at $300 million.
2. The Group possesses agreements for committed sales of $93 million in property assets, which are expected to be completed in FY2013 and FY2014.
Will there be a panic to sell off?
Boustead has never declared a dividend for 1Q and 3Q; it's always been 1H and FY results (interim and final/special) FYI.
As with any business, and especially one with a contract-type order book, one should reasonably expect "lumpy" revenues and earnings. I am not too concerned with the profit drop as I can see that the Balance Sheet is still healthy, and cash flows are strong (note that there is an increase in investment properties though, as part of the DB&L portfolio buildup). Geo-Spatial, Boustead's cash cow, has also improved revenues by +14% and PBT for 3Q by +8%.
There is reasonable expectation that the OMH investment will be approved at OMH's upcoming AGM, and Boustead can then sink in the S$23.3 million to get their 8.6% stake. The latest issue of The Edge Singapore has a write-up on OMH's Sarawak Project, and I plan to grab a copy of it to read.
Let's wait for the FY 2012 results come May 2012. I am expecting the usual 2c/share final dividend, and depending on the strength of cash flows, there may also be a surprise special dividend!
I am waiting for a panic sell off...
Price is temporary, value is permanent. When there is a seller, more importantly there is a matching buyer. Musicwiz has rightly pointed out that the cashcow geo-spatial is still growing strong, thus providing a strong recurrent base for other project based units to build on the strength.
Moreover, there is hardly any dent in the strong cash backing balance sheets that boast of high cash, temporary financing of contracted to sale investment properties and conservative high quality corporate bond holdings.
I have always viewed that the recent investments in OM Holdings as a beginning of a corporate cycle for Boustead after so many years of tough bargain hunting. Time will tell if further value creation is finally in progress for Boustead.
As I have been a wrong term investor for coming to a decade, it is definitely getting easier to buy Boustead for its strong recurrent cashflow (geo-spatial, ind-prop holdings) and its vision for new business units.
as someone vested in this company, i think we have to face the hard truth.
it was a bloody disastrous set of results!
i mean, no matter how you look at it, they still screwed up big time in thailand.
first middle east, now thailand.
you can find all kinds of excuses, but a screw up is a screw up!
with this kind of management, im really not sure about their investment in OM Holdings, or what kind of crazy things they r going to do with the cash.
being in the investment industry in malaysia, i can say a lot of things are not what it seems, particularly in the east malaysia, and particularly when money is involved, and definitely when dealing with people in the steel or smelting or construction industry in malaysia! im appalled that he is even dealing with these people at all!
i hope ff wong knows what he is doing. his recent track record has been poor.
im getting more and more worried that this company is lacking in focus.
to be honest, im not pleased with where this company is heading.
(14-02-2012, 11:46 AM)wozhaodaole Wrote: [ -> ]i hope ff wong knows what he is doing. his recent track record has been poor.
im getting more and more worried that this company is lacking in focus.
to be honest, im not pleased with where this company is heading.
Thanks for your views. In fact, I actually welcome alternative views as they give a different perspective on the same set of results.
While your angst is understandable, let's not be too quick to judge a company based on just one quarter of results. Also, for the OMH investment, i't has been stated time and again that it is long-term; thus I do not expect to see any earnings or cash flow accretion for at least 2-3 years.
Let's patiently wait for FY 2012 results to see how things go. Having been vested in FF Wong and BOustead for 5 1/2 years, I would think that unless his mind is not quite as clear as it was 5 years ago, he would still have the same conservative stance and views and would therefore shoot for slow, steady growth (with expected blips along the way), rather than explosive or rapid growth with a higher chance of imploding.
There is an article on OMH in the latest TheEdge issue
There is really no need to get upset when it comes to equities. Listed investments is the easiest to get rid off unlike unlisted business. Not happy, just sell the Sh** out of it and invest where you think you are happy.
Take it easy.
A report by Kim Eng on Boustead's 3Q 2012 for reading pleasure.