George Kent: 2 significant contracts

In the span of few days, George Kent announced 2 new contracts that probably will enhance its group's earning moving forward.

The first one was the LRT 3 contract awarded by Prasarana Malaysia Berhad. The group and their JV partner, MRCB are the Project Delivery Partner (PDP) to build the LRT 3 from Bandar Utama to Johan Setia.

Total development cost is around RM9 billion. Construction work will begin in early 2016 and expected to be completed in Aug 2020. The JV will get 6% management fees. So, George Kent probably will get around RM270 million for the whole project, which translated into around RM45 million annually.

I not sure whether this RM45 million is considered as operating profit or net profit. To recap, the group's net profit for the past 3 financial years was RM25mil, RM36mil and RM28 million respectively. Nevertheless, the annual RM45 million from the said project will contributed significantly to the group's bottom line.

The second contract was the delivery of 600k units of water meters to Water Supplies Department (WSD), Hong Kong over the next 2 years for a total sum of USD7.17 million which is roughly RM31 million.

From the press release, the group stated that this contract is the largest single order for the water meters division which further enhance their reputation in the meter industry. The meters will be delivered in 24 batches and the first shipment is in Oct 2015.

In another statement, the group anticipated the contract will contribute around 0.29 sen for financial year end 2016. That's 4 months contribution since the first batch is to be delivered in Oct.

0.29 sen is equivalent to RM871k in 4 months. So, estimate  the 2-year contract will contribute RM5.2 million to the group's bottom line assumed the delivery is constant throughout the years.

Ignore the USD fluctuation, profit margin will be 5.2/31 = 16.7%. Strengthening of RM against USD of course will affect the earning.

So moving into next year,earning will be quite certain unless there is delay in the construction work for the LRT 3 project. 

For the rest of the current financial year, do not forget the contribution from the Ampang extension line and the stable contribution from the meter division. 

OpenSys: Surprise bonus issue

OpenSys just announced its 2QFY15 result last week.

At first glance, it was a bit disappointed as I afraid the good performance recorded in the first quarter may be one time off did come true.

To recap, there was a jump in CRM machine sales in previous quarter.

It was a normal quarter for the group, just the selling and distribution costs increased 20% compared to previous few quarters. I have no idea about the spike. It may due to higher marketing activities to improve the sales during the quarter.

The main highlight is the group able to reduce its net debt/equity ratio from 23% in the previous quarter to 1.8% only this quarter thanks to better operating cash flow that resulted in higher cash balance.

From the segment reporting, it's good to see that the software outsourcing division was able to maintain above RM8 million revenue. Since the profit margin of the said division is much higher as well as the income is recurring in nature, the profit certainty and consistency are there.

Sale of machines is one time off and low in profit margin, but a small increase in net profit will help to drive up the EPS significantly like previous quarter.

The group also announce dividend and 1-3 bonus issue.

Is CRM still the key moving forward? I think so but the pace of converting it may not be that fast.

Recently few banks are implementing VSS to cut operating cost. So, hopefully they are going to replace the ATM with CRM and also outsourcing their cheque deposit machine to third party to reduce manpower costs.

Combine the quarter results and looking back at my buying price, it did not serve much margin of safety. I may wait until next quarter or dispose it to buy other counters when opportunity arises. Still tempting.

Aug 2015 Portfolio

August is a suffering month for me. 

The feeling is not good when you see so many counters in red color and you're having unrealized loss. 

So, it's better to stay away from it. Concentrate on finding the next stock :)

For local, I sold off PJDev and half of my holdings in Puncak and Gkent to reserve some cash. Others stay the same.

For Singapore, CES and HMI continued its slide in share price. Ho Bee still staying strong with some buy back from the company. All three companies reported satisfying quarter result last month.

For HK, share price of both China Saite and Welling Holding continue to drop. Both companies reported slight drop in net profit for the first half of the year.

Unrealized performance dropped into red zone, mainly due to CES and Welling Holding as their weight percentage are higher. Dividend yield is quite high given the share price now, but dividend declared by CES this year involved special dividend which may not sustain to next year.

Overall cash level is around 35%. I think I have to better utilize the cash in order to recoup the losses.

Meanwhile, learning some technical chart through OTB subscription and also study the companies recommend by him. Mostly export-orientated and technology company.

For HK stocks, still keep studying companies although the pace is not as fast as I wish. Sometimes kinda lazy and procrastinated.

Well, need to get more interaction with positive-minded people for motivation. Haha

Or back to the target list I set in the beginning of the year may help :)

PJDev: 4Q2015 Poor Poor Quarter

PJ Dev just announced its latest quarter report last week. I think its result disappointed many of us. And shock as well. 

There was a one-off gain of asset disposal at corresponding quarter last year. I just deducted it out at operating level and net profit level for comparison. So, probably would be slight difference in reality.

The group managed to record RM5.7 million net profit, poorest in 2 years.

Both revenue and operating profit margin also dropped.

Even worst is there was RM7.8 million loss in joint venture this quarter.

Net borrowings increased to RM362 million from RM135 million one year earlier. Net gearing ratio is around 0.3 which I think is still in comfortable horizon for a group whose main focus is in property development. Interest expenses increased two-fold from previous financial year. 

Cash flow without doubt was negative due to significant outflow for the increases in land held and property development costs probably for Yarra Park City project that caused the group to take up massive borrowings. 

Segment reporting provides some clues on the drops in performance. Found out that the group's account statement changed quite much after audited. Q4FY14 result released last year was quite different from the pass year result shown in Q4FY15.

Poor performance from the properties segment was due to delay in launching Cheras You City and Genting Windmill Upon Hills projects. But the group did mention that the take up rate in the respective Genting project was quite good after launched as well as voiced out concern regarding the slow down in the overall property market. 

Both cable and building material divisions recorded lower revenue and even worst was the hotel segment continued its loss from last quarter. 

Construction segment was the only bright spot. 

The group's prospect mentioned in the report doesn't sound quite good too. 

In another event, there was a statement stated that OSK Holding is deemed to have the control of the company even through OSKH has less than 50% of the voting right. But, the parent company probably will have more than 50% equity interest by the closing date. 

All in all, I probably will dispose my holdings in the group after some consideration. I think the share price will getting hard to reflect its high asset value after the acquisition/transfer end. It's such a waste as I owned it for a while and there was opportunity cost involved.

Chin Well: Q4FY2015 Moderate Result

After glancing through the quarter report, I think the result was quite moderate and a bit below my expectation.

Revenue increased marginally if compared to corresponding quarter last year. Unfortunately, its gross profit margin dropped significantly from 24.8% to 16.5%.

Even coupled with lower administrative expenses and marketing expenses, the group posted much lower net profit in the end.

Since the acquisition was completed at previous quarter, the group does not need to share the result to the minority parties anymore.

Assumed the group taking full control since the beginning of the financial year, full year EPS would be RM49.4 million net profit divided by around 300 million shares, which equivalent to 16.46 cents. PE is around 8.5.

In terms of balance sheet, one thing to highlight is the group able to reduce its net debt position from RM25 million to net cash of RM2.1 million even taking into account of RM8.3 million to pay for the acquisition. That's a very healthy sign.

This was contributed by its strong cash flow and positive high free cash flow. Minor set back was the group made an inventories write-off of about RM4.5 million.

Fasteners segment posted poorer result this quarter. Management explained that it was due to demand slow down in European countries as well as product mix that generated lower profit margin products.

Surprisingly, the Wire segment posted a loss in this quarter. I expected it to post a good result due to new product of panel fence being launched. But things went to the other way as revenue dropped. 

Management also did not mention anything regarding the DIY products that the group emphasize all this while as DIY products fetch higher margin. 

In summary, it still depends on its growth prospect in the Fasteners segment and its stability in the Wire segment.

Situation in European countries also affected its performance as much of the group's sales was export to this region

At a PE region of 8-10 may not provides much growth in the share price as current sell down in the market caused many companies selling at cheaper price and higher dividend yield. 

LCTH: Export definition a bit confusing

I get little bit confused when I read LCTH's 2014 annual report regarding its Local and Export segment reporting. 

At first glance, more than 90% of the group's products were export to other countries. The strengthening of USD would be a happy situation to the group. 

But when I read the definition of Local and Export market given in the annual report, it's noted that local market refers to customers within Malaysia who are non Licensed Manufacturing Warehouse. 

For those customers in Malaysia who are LMW are considered as Export market as well as overseas customers. 

I checked through online and found out that Licensed Manufacturing Warehouse (LMW) is a premise licensed under section 65A of the Customs Act 1967 and is directly control by Royal Malaysian Customs. It is control by way of documentation and subject to all customs rules and regulations. Licensed manufacturing warehouse is a facility provided for export oriented companies too.

Though I not very understand, I guess it's a register platform for the company to export the products oversea. 

Based on geographical information, RM91.45 million revenue was from Malaysia. 

Minus out RM4.69 million from the Local Market, thus RM86.76 million was related to sales to LMW in Malaysia which equivalent to 68.8% of overall sales. 

While the direct sales to overseas market (SG, US & others) accounted to RM34.59 million, which equivalent to 27% of overall sales. 

So, question remained is sales to LMW in Malaysia is denominated in RM or USD?

I flipped into Foreign Exchange Risk section, management highlighted that 58% of the sales were denominated in foreign currencies while around 51% of costs were denominated in RM in FY2014. 

So, estimated half of the sales to LMW in Malaysia was denominated in foreign currencies. (Just rough estimation after minus out 27% direct sales to overseas market). 

One thing is confirm is 58% of group's sales are denominated in foreign currencies while half of its costs are denominated in RM. That is a good thing in this RM weakening trend although the variation was quite high compared to previous year. 

Another sure thing is the group's USD denominated receivables was higher than its payable. That's good for the group moving forward too. 

So, the strengthening of USD works well for the group though not to the great extend at first glance that more than 95% of overall sales were for Export Market. 

Now left with how the management going to increase its sales as the sales were quite stagnant for a while... 

PJDev: Another plan in the making?

For the past one two weeks, I guess everyone who pay attention to PJDev's announcement in Bursa website probably has no difficulty to note that OSK Holdings Berhad had keep on acquiring PJDev shares through open market. 

From the first transfer of shares on 23-July, Tan Sri Ong Keong Huat had acquired PJDev shares through open market almost non-stop until today. 

The transacted price was around RM1.55, slightly lower than the offer price. 

Up to date, the number of shares acquired by OSK Holdings Berhad through open market is 31.46 million shares. 

His ownership in PJDev now is around 38.52% from 31.59%.

With average transacted price of RM1.55, total purchasing cost is RM48.76 million. 

So, what is his plan? 

To make it as OSK Holdings's subsidiary instead of investment in associate? 

In order to have at least 50.01%, OSK Holdings need 11.49% ownership more. 

That's equivalent to around RM80.77 million more. 

But do not forget PJDev at the latest quarter had RM150million cash on hands, RM253million property development costs and RM557million of land held for property development as well as RM600 million unbilled sales in hands. 

Though they have around RM520 million in borrowings. 

So, another good asset being steal away? 

Can offer better price or not? 

Or investors should directly buy OSK Holdings?

Interesting .. 

Let's see what is the outcome when the mandatory takeover offer end in few weeks time. 

AWC Berhad: Qudotech and DDT Acquisitions

Just a fortnight ago, AWC berhad made an announcement to propose to acquire QudoTech and DD Techniche for RM26.5 mil by combination of cash and issuance of 30.66 mils new shares at a issue price of RM0.38 worth RM11.65 million.

The acquisition is expected to be completed in 4Q15

The vendors made a profit guarantee of combined RM3.9 mils profit after taxed for each of the next 2 financial years.

In case there is any shortfall between the PAT of the target companies and the profit guarantee, the payment to the vendors will be reduced by the same amount of shortfall.

The group will issue 30.65 millions new shares which is equivalent to 13.6% of existing share capital at a issue price of RM0.38 to raise RM11.6 million while the rest of acquisition cost comes from internal cash and the payment is made in 3 phrases.

The first RM7 million is the down payment while the second and third payment only need to be paid upon confirmation that the profit guarantee is met at the end of the respective financial years.

Based on the profit guarantee, PE will be around RM26.5/RM3.9 = 6.79.

Unfortunately, the acquisition announcement did not show much details on the 3 financial statements of the 2 target companies, so EBIT/EV could not be measured.

Qudotech involved in M&E engineering works, specifically in all manners of plumbing works and currently has RM66 million order book on hands.

Revenue was increasing for the past 3 years. What's more with increasing profit margin with the latest half year result record at 12% net profit margin, up from 7% in FY2012. 

ROE was more than 30% too with minimal borrowings and gearing. 

DDT is involved in contracting for mechanical works, piping and systems design for rainwater harvesting products and trading of specialized water tanks. 

DDT is considered as a new start up company. The company just incorporated in 2012. 

Net profit was increasing too with expected closed to RM1 million net profit would be recorded in the latest financial year ended June 2015. 

DDT stands to benefit from the regulatory to make rainwater harvesting systems a mandatory part of building plans for commercial and industrial buildings with a roof area equal to or exceeding 100 square meter in Perak, Selangor, Johor, Melaka, Kelantan and Perlis. 

So, I think it's not that hard for the 2 target companies to meet the profit guarantee of RM3.9 million. 

There is a proforma shown based on the profit guarantee added on top of the net profit attributed to the shareholders at FY2014 and divided by the enlarged no. of outstanding shares, EPS is 4.24 cents.

Based on the share price now, the valuation may not cheap. Worst case, the EPS will be diluted due to the ESOS implementation.

And historical record showed that the group's existing business is not so stable especially the engineering division.

Margin of safety is not there.

Will only look at it again when the price is right or the group's fundamental improves.

AWC Berhad: Getting more than ABC

AWC Berhad is not a well known company with market capital less than RM100 million. 

I came to know him when the group made an announcement regarding its acquisition that will probably increase its top & bottom line. After watching how latitude, chin well, Ge-Shen and KESM performed after acquisition, I think I need to spend some time to understand it. 

The group has 3 divisions,

Facility division involved in asset management services providers such as cleaning, civil & Structural works, M&E maintenance, parking, landscaping and transport system.  Facility division holds the 10-year concession to provide maintenance for some buildings of Federal Government Common User buildings and contributed a bulk to the group's revenue.

Engineering division provides Ventilating & Air-conditioning system, Building Automation System and Security & Crisis management system to clients. It also distributes valves and hydronics systems.

Environmental division provides automated waste collection system called STREAM to transport municipal solid waste via pipes to a central waste handling facility. So that the waste collector does not need to go door-to-door to collect the waste. It's noted that the group owns only 51% of this division

The group made a loss at FY2008 due to poor performance as well as one off provision and impairment. 

That year, the group developed a Business Transformation Plan (BTP) to refocus on its core business, improve human capital management, develop the group's facility division into market leader and expand its STREAM business to Middle East. 

Well, the management able to improve the group's performance from loss making, but not to the extend that called splendid or awesome. 

The group's performance thereafter was quite volatile, maintained around RM100-200mil and RM4-10mil top line and bottom line respectively. Net profit margin was 3-6%.

The group once had a technology division (IQL group) before but it made RM3mil and RM7.3mil losses in FY2011, FY2012 respectively. Soon, the group decide to divest this division in June 2012.

In terms of balance sheet, the group was in net cash all this while with minimal borrowings.  

This can be explained by the group need very less amount of capex every years.

Its operating cash flow was well-supported by the concession with the government. Just sometime the increases in trade receivable dragged the operating cash flow into negative region, probably due to Middle East contracts. 

The group's cash conversion cycle was below 90 days all this while which is considered okay to me. 

In terms of ROE, the group managed to record only single digit number for the past few years. 

For its ROIC, it's around 15%, except the spike recorded in FY2010 and FY2011 due to better operating profit. It's noted that in 2011, the group cancelled out RM0.20 out of par value of RM0.50  to RM0.30 to off-set the accumulated losses.

Its engineering division did not fare quite well all this while, its profit margin was quite low and contributed very minimal to the group's bottom line

The group was focusing more on its 2 other divisions, namely facilities and environment.

Facilities division provides stability to the group. 75% of the Facilities's revenue derived from the concession with the government to provide asset management service while the rest came from the private sector. But the management need to manage its operating costs very well and it's noted that the electricity costs account for more than 40% of the Concession's cost of sales. 

Environment division depends on its STREAM, the automated waste collection system. 

Throughout the past few years, the group managed to clinch some contracts in UAE through the job venture with Model Building UAE and Dallah Establish to design and supply automated waste system. However there was a second project in Al Reem Island worth RM150 million was delayed until today as the development there was stop. 

Apart from that, STREAM is well-accepted at our neighbor country, Singapore too.  The group was also awarded operations and maintenance contracts for the STREAM systems such as in Terminal 3 Changi and Resort World Sentosa after completion which provide recurring income to the group.

With lesser amount of development in near future, it's expected the award of STREAM system to the group will slow down. But nevertheless, the system is quite good in terms of convenience, cleanliness and cost saving. It's just matter of time the developers will start utilize such system in their development especially at place where space is limited. 

Based on some online articles, the division had around RM60 millions order book at the end of Dec 2014. 

So, that's the basic study on the group

Will discuss the acquisition in the next post. 

July Portfolio

July was a poor month for me. Un-realized gains had dropped to almost zero. Have to get myself ready to face any negative performance soon.

This month's poor performance was dragged down by HK and SG stocks especially the 3 HK stocks that saw more than 10% drops m-o-m.

China Silver was the most hit and it just issued a profit warning after last Friday closed. I probably will sell off the remaining shares as the management expected that the group will announced no less than 90% drop in net profit for the first half 2015. That was a shocking news to me. Never expect that.

China Saite too having a roller coaster ride last month, dropping more than 50% from its recent high and now forming a base around HK1.2+. Let's see what is the result they are going to release in few weeks' time. 

CES's price continued to drop last month. It's same for HB land. Probably need to hold both property/construction counters for a while. 

HMI's price also in declining mode. No more news regarding its Mahkota Hospital sale.

Add in Gkent in my portfolio few days ago. I have been following George Kent all this while and made a few bids before this but all did not fall into my bidding price. So, I just watched the price went up and up. In the end, I was too emotional and bought it right away. Just a bet that they are able to get the contract on the LRT 3 project. And if the current Ampang LRT extension project is on schedule, its engineering division will post better result moving forward.  

Recently was little bit busy and also (lazy) to study new companies :(

August is another month that most companies will release their quarter reports. 

Have to get up and keep moving forward. I also signed up OTB's course and hopefully able to learn some technical skills to brush up my buying and selling technique. 

Sun Con: Q1 2015 Result

Sunway Construction group is going to list in few days time and the group just announced its first quarter result few days ago. 

It was a stable quarter for the group. Nothing special to mention on its income statement. No comparison data was given and I was little bit lazy to check back the bottom line contributed by the Construction group to Sunway group preceding quarter last year. 

Balance sheet was normal, just the trade payable dropped quite much.  

Operating cash flow was weak. It would be zero or negative if not for the dividend contribution from its associates and JV. 

What's interesting is still the segment reporting. 

It's clear and I think I mentioned in my previous post before that although the construction segment contributed a big amount to the group's revenue, but due to its lower profit margin, Precast segment contributed more to the group's bottom line. 

Operating profit margin for Construction and Precast were 3.21% and 23.4% respectively. 

Its precast concrete products are mainly supply to projects in Singapore. So, any slowdown in Singapore construction and property development will have great impact on the group's precast unit. 

I guess the media kept focusing on how many and how big the contracts can be awarded to the group. But since the profit margin is so low, any cost overrun or mis-estimation would get the group into trouble. 

Investors have to keep note of that :) 

Review on 1H2015 sell transaction

Everyone also wishes to buy low and sell high. I mean everyone. But that's not the case in reality. That may be someone able to do it, but I think the consistency is not there. 

I'm am not a very long term investor. I will sell it if I think the price meet my target or I think I have better return elsewhere.

So, half year gone and I think it's better for me to review my sell transactions for the past few months. 

SCGM

I sold it at RM2.7x with around 50% gain in April. Although I knew the drop in oil price and currency exchange are all working in favour for the group as well as its own organic growth and new product launching, but I think its price already reflected that as well as it was trading at a PE of around 18 that time. So, I made a sell call. The company continue to perform well and so its share price till trading at RM3.4x currently. Perhaps I should use forward PE to evaluate this kind of growth stock next time. 

ABRIC

ABRIC was a asset play for me due to its high net cash per share. I sold it around RM0.52 with around 25% gain in April too. Patience always the key when investing based on asset as you have no idea when the market will value its assets. The price once shot up to around 60 cents before retraced back to current price. I'm quite satisfied with this transaction as asset play always provides certain margin of safety and its concept is easy to understand. Just sometimes, you may need to park your capital there for a while.  

PJDEV-WC

I sold it at a loss of around 10% in April too. I bought it at a rush and at a high price in the beginning as well as its mother share. I thought the corporate transfer will take place within 6 months, little bit I know it can be taken for so long. And at that point, I was running out of capital so I decided to sell it as I did not want to place too much capital on the same stocks (mother & son) although the warrant will provide better gain in percentage and loss also in opposite. I only left the mother share and used the proceed generated and converted into HKD to invest in HK stocks. 

IFCAMSC

I sold the counter around May at RM1.4x with a gain of around 70%. The counter once shot up to RM1.8x plus as well as being dumped until RM0.8 thereafter. The counter still has some growth prospect, but the valuation is quite high and there is some sort of frying element on it. So, I decided to say good bye to him. 

TAKASO

I made a loss close to 25% in this short trade. I bought its warrant & converted them into mother share as the share price of the mother share up a lot while the warrant did not move very much. The substantial shareholders, Ong Kah Hoe kept increasing his ownership in the group and the group diversified into construction business look like something good going to happen. So, I bought in. It turned out to be a bad trade as the share price dropped a lot after 2 weeks of conversion. This really taught me a lesson, never touch warrant that trade at a big discount to his mother share again. Fishy fishy. 

CHINA SILVER

I cut half of my holdings on the stock at around 150% gain, so the remaining will be considered as free shares. This trade contributed significantly to my overall realized gains this year. It's share price is quite volatile but I think its coming half year result will be quite good. So, I will just keep it for the time being. 

So, that's for this half year. 

Some losses, some gains. 

When looking back now, there are some stocks trading higher after I sold. Some trading lower currently. 

I believe buying low solves the problem of selling as you still earn in the end, it's just the matter of how much you earn. So, margin of safety is important. Very important indeed.

I still learning day by day. Hopefully, can minimize my mistakes moving forward. 

Recap on last week

Market was bit volatile last week.

Greece issue and Chinese stock market sells-down as well as Najib and his 1MDB issue in local filled up the newspaper's headlines. 

And on last wednesday, Hang Seng index closed almost 6% down, its biggest one-day drop for nearly seven years. 

Nearly half of the listed companies in Shanghai and Shenzhen filed for trading halt in an attempt to prevent further losses explained the seriousness. 

Even the regulatory commission made a new rule that controlling shareholders and managers who are holding more than 5% of the company's share could not reduce their holdings for 6 months could not stop the sold off. 

Local bourse index dropped below 1700 again, after few months of crawling back to above 1850.

So, is it a good chance for investors to buy some fundamentally good companies during this volatile market?

Just like what Warren Buffet said "Be fearful when others are greedy and greedy when others are fearful" ?

But it's always easier to say than done. 

Watching your paper gain getting lesser and lesser is no joke. 

And to buy it when the counter drops more than 50% made you wonder is it something bad happened to the company which you may not aware of.

The angel of your side told you that the company fundamental remains unchanged. You had studied it few times and it's a bargain now. 

But the devil of your side told you to wait and it may drop even lower. Your hard earn money will just gone like that. It's very scary. Stay aside first. 

Discipline, mentality and decision making. 3 important elements that you cannot learn from books and others. 

Experience it 

Investing really is a life long journey. 

George Kent: Q1FY16 update

George Kent just released its first quarter result last week. 

The group recorded lower revenue compared to same quarter preceding year and almost half if compared to previous quarter. 

But thanks to its much better gross profit margin, the group able to record better bottom line. 

Operating income and expenses almost similar. 

No dividends was declared. 

In terms of balance sheet, both trade receivables and payables also dropped. 

Good thing is the group able to reduce its loan amount to almost same as one year before. 

From the cash flow statement, it can be seen that the group generated a very healthy operating cash flow. Since its manufacturing segment only required very low amount of capex, the group chalked up a very good free cash flow. 

Here comes with the interesting part, segment reporting. 

For its manufacturing segment, I would love to see the segment able to maintain above 20% operating profit margin. That would be a very good improvement from 15% (FY2014) and 19% (FY2015). Management pointed out that it was due to lower operating expenses incurred. But I guess for manufacturing industry, normally the management able to reduce the operating expenses to certain extend only and maintain from there. 

For its engineering segment, management pointed out that the gross profit margin is higher due to higher weightage on revenue from certain projects with relatively higher profit margin and the Group’s Kuala Lipis Hospital Project has just started. However, the contribution of the hospital project is quite low. 

I believe the higher profit margin of the engineering segment is not sustainable due to the nature of the revenue recognition of contract based projects just like what happened in Q4FY14. It's still highly depends on the Ampang line LRT extension project. 

Dato Tan pointed out that there was delay in Ampang Line LRT extension project. However, Prasarana CEO stated days later that there was no delay and the phase 1 is on track and will begin operation in Oct 31 2015. So, who should we trust?

Besides, Dato Tan also mentioned the group target to add another RM2 or RM3 billion worth of contracts this year on top of RM1 billion orderbook on hands. I think we should ignore this kind of blow water issue. I still remember he said the same thing during last year AGM on top of gonna diversify into oil & gas segment. 

Well, I think he did not expect the sudden drop in crude oil price at the end of last year which indirectly affected the numbers of construction jobs awarded. 

The biggest surprise to me about George Kent is ColdEye bought the counter recently as shown in the latest annual report. 

He must have a very good reason to buy. Should I follow? :)