SYCAL (9717) - Cycling North
Sycal
Ventures Berhad (9717), previously known as Cygal Berhad, is a low
profile construction based company. While the company had it's property
arm, most of the revenue and income is derived from the construction arm
of the group.Sycal Ventures Berhad had recently caught attention of some investor after putting up a several consistent quarterly performance that had been growing. For the past 4 quarter, the quarterly result had been better in terms of higher revenue and EPS than their previous corresponding quarterly result.
Where could Sycal be heading in the coming days, especially when the coming final quarter for FYE 2014 that will be going to announce soon around the corner. Let's have a quick look at the price movement of Sycal.
Based on the price chart, Sycal had been trying to pitch forward during the middle of September as a convincing strong volume is head for a test at RM 0.50. However, the attempt had fall short after the global equity market had weakened. Sycal had spent most of it's time consolidating at RM 0.40.
Should Sycal be able to break above RM 0.40 in a convincing manner in the coming days, Sycal will form a new trading range between RM 0.40 and RM 0.48.
Sycal - Cashing in
Sycal's focus had always been in the construction sector. While Sycal local construction base might be at Perak, it's services might not fall short in Kuala Lumpur as well. Sycal had been getting construction works from Cygal Development Sdn Bhd, which is one of the core client that had common owner. The most recent project is being the Pullman Hotel in Bangsar that was being contracted to Cygal Development Sdn Bhd and constructed by Sycal's construction arm.
To date, Cygal Development Sdn Bhd had owned approx RM 69 million, which will see periodic repayment starting from year 2014 to 2016, averaging RM 23 million a year into the cash flow of Sycal Venture Berhad. The huge cash coming in might rings an opportunity for Sycal to finally reward the patient shareholder with a possible dividend.
Cygal Development Sdn Bhd had a 12 year contract with Pullman Hotel until 2022, which puts up opportunity for Sycal for more jobs in the coming days when Pullman Hotel starts to expand for their next spot. Currently, there are 3 Pullman Hotel in Kuching, Bangsar KL and Putrajaya. There are possible outlook for Pullman to expand to Johor and Penang in the coming days.
Based on FYE 2013 result, Sycal had managed to put up 5.37 cents in EPS with a NTA at 0.59. For the year 2014, the cumulative 3 quarters EPS is standing at 4.56 cents, with huge growing revenue and net profit. NTA inched up higher towards RM 0.64 per share.
Sycal performance had been very consistent since 2013. Should Sycal start to give out dividend, it will definitely attract more investor towards this company in the coming days.
According to sources familiar with the company, Sycal's book order is currently sitting on more than RM 600m of jobs, a work good enough to keep the company busy for the next 2 years.
With the growing trend in Sycal, the projected EPS for FYE 2014 will be looking at a possible 6 cents, trading at a conservative PER x8 will value the company at RM 0.48.
Sycal will be an interesting stock in the coming days based on :
- Anticipated better result in FYE 2014, with EPS projection at 6 cents, valuing the shares at RM 0.48 based on PER x8
- Indirect business opportunity with Pullman Hotel through Cygal Development Sdn Bhd
- Cygal Development Sdn Bhd repayment of RM 69m from 2014 to 2016, averaging RM 23million a year, boosting company cash position, and also putting up chances for a dividend for shareholder
- Huge order book amounting more than RM 600m in hand.
Cycling along?
Bone's short term TP: RM 0.45
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com/
