Hot Stock Gadang rises 10% on stellar results, dividend

by **Cals** Sat 01 Aug 2015, 03:18

Hot Stock
Gadang rises 10% on stellar results, dividend

KUALA LUMPUR (July 31): Gadang Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) rose as much as 15 sen, on the back of its fourth quarter results which surpassed analysts’ expectations.
Property and construction entity Gadang (fundamental: 1.7; valuation: 3) rose to an intraday high of RM1.59.
At 11.24am, the stock pared gains at RM1.54, with 4.59 million shares traded.
Yesterday, Gadang said it recorded an almost three-fold on-year surge in net profit to RM24.55 million in the fourth quarter ended May 31, 2015 (4QFY15), from RM8.59 million. Revenue increased to RM170.48 million, from RM142.99 million.
Full year FY15 net profit was higher at RM58.77 million or 27.16 sen per share, as compared to RM43.23 million or 21.98 sen per share a year earlier. Revenue grew to RM588.12 million, from RM544.95 million.
Gadang proposed a dividend of five sen a share for the quarter under review.
In a note today, JF Apex Securities said Gadang’s full year net profit constitutes 180% of its forecast, while revenue accounted for 108% of estimates.
JF Apex said Gadang was undervalued, given its low forward price-earnings ratio (PER) of five times, compared to its historical average PER of eight times.
“Looking forward, we believe the group is able to maintain its growth trajectory, backed by the on-going construction projects and continuous sales activities generated by the flagship projects in property segment,” JF Apex said.
JF Apex maintained its “buy” rating on Gadang shares, with a target price of RM1.98.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)