ECOBUILT - WHAT A DUD?

The results for the quarter was out yesterday. Boy, was it a shocker! It was a mere 560,000 based on a revenue of 23 million. The net profit margin was just 2 percent. Other expenditure which was not summarized was 3.1 million. We could only wait for the AGM to question this expenditure.

Is it a loser stock? Lets examine it.

From the annual reports it shows the combination of deposits, prepayment and cash amounts to prudently circa 42 mil. Based on an enlarged shared capital of 313.5 mil, that's cash backing of 13 cents. So, its fairly comfortable with loans of 2 million almost negligible.

The PV project is outsourced to RCSB so the accrual earnings are seen when the conclusion of the multiple proposals comes to fruition at 14 October, so it will be included in the accounts ended 31 Nov. So the quarter earnings is largely affected by the amount in other expenditure which yet to be questioned.

Lets look forward for the quarter ended November and beyond.

Both the Shore and PV projects supposed to end mid 2021, that's two years. Prudent estimation there is 330 million work order left. Assuming a 7% net profit margin, that's 2.88 mil per quarter.
Assuming the new Sentral project of 248 mil commenced for 3 years, each quarter could bring in 1.4 mil.
The first 2 project is supposed to accelerate as they are past the 1st year. So a prudent guesstimate would be 4.28 mil per quarter which translate to 1.3 cents eps per quarter that's 5.2 cents per year. Basing on a PE 8 that's 41 cents.

A chance to double your money based on the above guesstimate. Remember, the private placement was at 24.5 cents.

Future projects? Damai Suria looks quite a shoe in as Ecobuilt constructed the showhouse for Titijaya. Other projects from Titijaya looks like a possibility too.

You decide.

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