Gamuda 2Q net profit up 38% to RM68m

GAMUDA BHD's earnings rose 38% to RM68.03 million in the second quarter ended Jan 31, 2010 from RM49.05 million a year ago, boosted by the strong performances in all its divisions.

It said on Thursday, March 25 the revenue was RM603.24 million compared with RM591.73 million. Earnings per share were 3.37 sen versus 2.45 sen.

For the first half, net profit was RM131.05 million versus RM104.09 million in the previous corresponding period. Revenue was RM1.22 billion compared with RM1.20 billion.

"With the existing CONSTRUCTION [] projects progressing on schedule and the recovery of the property market, the Group's performance is expected to perform well in the remaining quarters of the current financial year," it said.

On the electrified double track project, it said work progress haf improved and to-date 93% of the land has been handed over to the project company. The work progress is expected to accelerate in the next two quarters.

As for the new Doha International Airport project in Qatar, it said the project is progressing on schedule with 80% of the works completed. Progress payments from the Qatar Government continue to be on time.

On the Yenso Park and sewage treatment plant projects in Vietnam, it said they were progressing well. The recent devaluations of the Vietnamese Dong had no significant near term impact on the group.

As for the group's property division, it added that it continued to benefit from improved market sentiments, with semi-detached houses and bungalow homes in gated and guarded parcels in great demand.

"The property division's performance is expected to improve further in the remaining quarters of the financial year," it said.

This good financial result should support Gamuda to move upward amid rising world stock markets. There are a few Gamuda call warrants listed on KLSE, namely Gamuda-ch, Gamuda-ci, Gamuda-cj and Gamuda-ck. Among these 4 call warrants, i would pick Gamuda-ch as my favourite due to its low premium of 2% amd gearing 3x. The maturity day is 24/9/2010.  The other 3 Gamuda call warrants have ridiculously high premium of between 10%-25%.

Ok, good luck.

GOon

IJM-WB up 14%

Macquarie Equities Research reiterated its buy call on IJM and raised the target price to RM6.00 from RM5.50 following a review of the company's prospects. 


IJM is one of the broker's top picks in Malaysia, saying that the firm will be a key beneficiary of infrastructure spending, both domestically and in international markets such as India and the Middle East.

Potential catalyst to IJM's share price could be the award of the Besraya extension job in fourth quarter this financial year, new construction wins and successful property launches.

"We see IJM as a beneficiary of India's aggressive road spending plans, given its track record. Recent press reports indicate the Indian government's plans for US$50 billion (US$1 = RM3.41) worth of road projects over the next two years.

"Any potential wins in India are positive for the company and would add to IJM's existing orderbook of RM4.4 billion. In total, we have assumed RM1 billion worth of new jobs in financial year 2010 and RM2 billion in financial year 2011," Macquarie said in a January 22 report.

In addition to potentially clinching key domestic projects via its construction division, IJM's building materials division, ICP (Industrial Concrete Product), may also benefit from the increased construction activity, it noted. 

IJM-WB (warrant) up 14% since I last talked about it last Saturday. What makes it more interesting is IJM-WB still comes with a discount of 3.6%. It is trading at RM1.17. With a gearing of 4.06, it should moves up another 14% (3.6% X 4.06) or RM0.16 to RM1.33 to eat up all the discount. It still has another 148 days before it expires. Sooner or later, the discount has to be realized.

GOon