Boilermech: Good But Expensive

Boilermech FY14Q2 Financial Result

BOILERM	FY14Q2	FY14Q1	FY13Q4	FY13Q3	FY13Q2	FY13Q1
Revenue	55.3	51.5	34.6	44.0	45.2	42.0
PBT	9.6	8.5	7.6	8.1	7.2	7.4
PBT%	17.4	16.5	22.0	18.4	15.9	17.6
PAT	7.2	6.3	6.8	4.0	5.2	5.4
Total Equity	85.5	84.3	78.7	71.6	70.4	64.0
Total Assets	207.2	205.8	177.0	157.7	157.3	152.8
T/Receivables	51.2	59.3	61.7	49.1	45.5	43.7
Inventories	30.4	21.6	19.3	20.1	16.9	18.1
Cash	7.3	26.2	13.1	8.4	8.4	5.8
Liq Inv	59.6	40.7	27.0	15.9	25.8	43.4
Total Liab	121.6	121.5	98.3	85.9	86.9	88.8
T/Payables	34.6	34.7	28.6	26.5	30.0	28.7
ST Borrow	0.4	0.4	0.4	0.4	0.4	0.4
LT Borrow	0.5	0.6	0.7	0.8	0.9	1.0
Net CF	26.8	26.8	1.9	-14.0	-4.0	11.1
Operation	33.6	28.2	28.5	12.4	17.6	11.3
Investment	-1.4	-1.3	-22.4	-22.3	-21.4	-0.1
Financing	-5.4	-0.1	-4.2	-4.2	-0.2	-0.1
EPS	2.77	2.46	2.62	2.44	2.03	2.11
NAS	0.33	0.33	0.31	0.28	0.27	0.25
D/E Ratio	Net C	Net C	Net C	Net C	Net C	Net C

Boilermech latest result is good. Its revenue increases 7.4% from RM51.5mil to RM 55.3mil QoQ. Net profit rises 14.3% QoQ to RM7.2mil due to better margin in current quarter.

For 1HFY14, its revenue and net profit increase by 22% and 26% compared to corresponding period of last FY.

The better results are all due to better business activity in the company.

I think Boilermech will have no problem to produce RM30mil net profit for the whole FY2014. Base on the current total shares of 258mil before the proposed bonus issue, my own target price for Boilermech is only RM1.74 (PE ratio of 15x).

Apparently at current share price of RM2.44, even though it has proposed bonus issue and transfer to main board, I will not touch it unless it goes down below RM1.50, which is highly unlikely...