转贴：Weida: Property To Stir Excitement - Bursa Dvmmy

我觉得这篇文章的作者的功课很棒，若要看原帖可以点击下面的主题。文中作者指出了Weida的几个隐忧，并认为产业的盈利大爆发应该在2015年第3季左右，这与我的想法不谋而合。或许唯一不同的地方就是Weida已是我的主力，我可能会有主观的思维模式而Bursa Dvmmy则还没有买入，因此文中的看法会比较中立，文中的隐忧如下：

• 管理层的3分钟热度，如杀鹅取卵的卖出Mutiara Goodyear的股权与开始要收成的种植业务。
• 过去数年盈利的不稳定性
• 建筑业务的营业额逐年减少
• 管理层是否能够实现5年展望如生产业业务翻倍
• 股市即将步入熊市（金融危机？）等等的潜在风险

我认为这些都是值得我们去研究并思考的因素，牛市第3期的投资都需要步步为营，多点研究自家投资的公司总是错不了的。

Weida: Property To Stir Excitement - Bursa Dvmmy
Friday, 11 July 2014

Recently Weida's share price has been pushed up by heavy volume. It seems like long term investors are taking position in this stock in anticipation of better financial results ahead.

Why better results? It's because Weida's investment in property development starts to bear fruits.

In its latest quarter of FY14Q4 which ended in Mac14, Weida registered its first ever revenue from property development at RM13.7mil, with a PBT of RM1.1mil.
This comes from the work progress of Urbana Residences @ Ara Damansara which was launched in the final quarter of calendar year 2013.
The development with GDV of RM230mil is almost fully sold.
So it is only about 6% of the GDV recognized. We can expect Urbana's sales to contribute massively to Weida in the next 2 years.
Furthermore, its RM350mil second project at Mont Kiara is on the verge of being launched soon. I guess Weida should not have a big problem to do well in Mont Kiara. It is the last chance before GST.
Both projects are joint-venture in which Weida holds 85% of them. The total GDV of RM580mil is quite a huge figure for a small company like Weida.

A 15% net profit margin will produce about RM74mil net profit after minority interest to be distributed in the next 3 years or so.

We can study Fitters to have a glimpse of how Weida will perform in the near future.

Both Weida & Fitters are very similar - mainly a manufacturer with construction business and then venture into property. It's just that Fitters entered property much earlier.

These 2 property projects by Weida were already made known to the public last year and it is predictable that Weida's share price will rise sooner or later. However, I still haven't put my money in it yet...
I notice that in high rise property construction, initial billing progress will be slow and little in the first 1-2 years after launch, and will spike in the third year or at least after the whole framework of the building is done.
As Urbana was launched in late 2013, I'm thinking to take position only after mid-2015, unless Weida is extremely undervalued at one point or its other business segment are doing extremely well. However, it seems like other business segment are not performing too well.

WEIDA (RM mil)	FY14Q4	FY14Q3	FY14Q2	FY14Q1	FY13Q4
Revenue	81.5	80.5	71.3	88.0	96.9
PBT	11.3	4.9	1.9	14.0	3.3
PBT%	13.9	6.1	2.7	15.9	3.4
PATAMI	10.5	1.9	0.3	9.9	55.0
Manu Rev	47.5	50.9	38.2	54.2	44.5
Manu PBT	3.1	6.3	5.7	7.1	2.9
Work Rev	16.4	26.3	27.6	28.8	58.3
Work PBT	7.1	-0.2	0.2	6.7	6.7
Service Rev	4.0	3.3	5.5	5.0	4.7
Service PBT	0.5	0.9	-0.2	0.5	-0.2
Prop Rev	13.7	0.0	0.0
Prop PBT	1.1	-1.4	-3.5

Weida's quarterly results are quite inconsistent, especially in the work segment just like a lot of construction companies.

It delivers a good FY14Q4 quarter result mainly due to contribution from work segment, not the maiden profit from property segment.

However, revenue from work segment drops consistently for the past 5 quarters and there is no guarantee that it will pick up in the next quarter. We don't know whether they are out of contract or it's all because of timing of billings.

WEIDA (RM mil)	FY14	FY13	FY12	FY11	FY10	FY09
Revenue	321.4	380.6	309.7	285.9	276.2	267.9
Revenue growth %	-15.6	22.9	8.3	3.5	3.1
PBT	32.0	30.2	30.1	34.5	28.0	26.6
PBT%	10.0	7.9	9.7	12.1	10.1	9.9
PATAMI	22.6	50.8	25.2	21.8	17.2	15.0
PATAMI growth %	-55.5	101.6	15.6	26.7	14.7
Manu Rev	196.2	196.8	140.3	116.0
Manu PBT	23.5	23.1	14.1	15.2
Work Rev	93.6	184.7	141.8	142.4
Work PBT	12.5	19.4	22.9	22.7
Service Rev	17.8	27.9	27.4	27.5
Service PBT	1.7	1.2	-0.5	1.5
Prop Rev	13.7
Prop PBT	-3.8
EPS	17.80	40.00	19.87	17.21	13.55	11.84
NTA	2.86	2.74

Since 2009, Weida's revenue & PATAMI grow consistently until FY13 when it got a special gain from disposal of plantation business.

FY14 was not a good year as PATAMI of RM22.6mil was even lower than FY12's level of RM25.2mil.

I anticipate its manufacturing segment to grow convincingly in FY14 amid robust property & construction activity in the country but it did not really happen. Contribution from work segment also dropped sharply though more telecommunication towers are expected to be built in East Malaysia.

I think the new telecommunication towers contract will be very important to Weida, just like it is for Instacom.

Perhaps the award of contracts is slow...
In an interview with The Edge in 2013, Weida's MD Datuk Lee has a 5-year plan:

• RM70mil NET rental income for telecommunication tower
  • FY13: RM19.4mil
  • FY14: RM12.5mil (PBT from work segment)

• RM60mil concession income for septic sludge treatment
  • FY13: RM1.2mil
  • FY14: RM1.8mil (PBT from service segment)

• RM400mil revenue of HDPE products
  • FY13: RM196.8mil
  • FY14: RM196.2mil (Revenue from manufacturing segment)

Frankly, I am not too optimistic that the target can be achieved even though 2018 is still quite far away, especially the target income for service segment. We may experience another financial crisis within this period of time and everything can change。

Overall, Weida is still a net cash company (after disposal of plantation business) with high NTA (RM2.86). At current share price of RM1.80, PE will be 10.6x base on FY14 EPS of 17sen. Its current ROE is at an unattractive 6.2% though.

It is noteworthy that Weida has made quite a few investment since 2007.

It expanded overseas into the Middle East by carrying out a sewerage & water treatment plant project for Syria government. Unfortunately, Syria was hit by civil war later so it ended up with bad debts and the plan to further expanding its presence there was halted.

In 2007, Weida acquired a significant stake in a property developer Mutiara Goodyear and later became its largest shareholder at 13.8%. 

Mutiara Goodyear has a township project over 1,000 acres called Bandar Tasek Mutiara in Simpang Ampat, Seberang Perai Selatan of Penang.

Earlier in 2006, the ground breaking ceremony for Penang Second Bridge has been done and Simpang Ampat is expected to benefit from the new bridge. This might be the reason Weida bought Mutiara Goodyear's shares I guess.

However, Weida sold all its stake in Mutiara Goodyear in 2009, after Penang state fell into the hand of opposition in 2008.

Thereafter, Tambun Indah came in and took over the development of Bandar Tasek Mutiara and renamed it to Pearl City.

Look at how well Tambun Indah has done in recent years on its Pearl City, aided by the completion of new bridge and development of Batu Kawan. Weida just missed a golden opportunity to increase the value of its investment by selling early for small gain.

In 2007 as well, Weida also ventured into oil palm plantation in which it acquired 16,000 acres of land in Sarawak and planted it with oil palm trees.

The palm trees will mature in stages from 2012 onward but Weida decided to sell all its stake in the end of 2012, which was the time when the plantation segment was expected to contribute to its bottom line.

Furthermore it was also the time when the CPO price was at recent historical low. Soon after Weida sold the plantation business, CPO price has reversed its downtrend and head upward from early 2013.

MKH also ventured into oil palm plantation business at the same time with Weida though MKH has bigger plantation size. Now MKH is starting to taste the exponential profits from it.

Weida sold plantation asset to TH Plant in Oct 2012

So I think Weida has lost the opportunity to earn good recurring income with minimal extra cost for the next 20 years.

With the money from disposal of plantation business, Weida diversified into property development and has launched its maiden project in the end of 2013. Property is a lucrative business but is it too late to join in now?

Anyway, there are still many companies queuing up to share the cake of property boom.

At the moment Weida has one ongoing and one future property development project. It is yet to acquire new landbank to extend its property business.

Investors should pray that this time it is not like previous "hangat hangat tahi ayam" investment.

For the 5-year plan, I hope the the MD will keep to his words.