|P/ Dev Cost||4.0|
Wednesday, 27 November 2013
Weida: Disappointing FY14Q2
Weida FY14Q2 Financial Result
After posting an impressive FY14Q1 result 3 months ago, Weida's current FY14Q2 result is terrible. Its revenue drops 19% QoQ from RM88.0mil to RM71.3mil, while net profit drops 97% from RM9.9mil to just RM0.3mil.
Weida's manufacturing segment suffers significant drop in revenue and profit due to lower demand in this quarter. While the revenue from work segment remain flat, its PBT drops substantially due to one-off construction cost in this quarter and lower contribution from telecommunication towers. Its service segment suffers minor loss due to disposal loss of RM0.8mil in the quarter.
Weida's property segment has just taken off with its maiden project Urbana Residences (GDV RM231mil) launched in early Oct. It may start to contribute to the group's profit next quarter. I estimate this project may give an average of RM10-12mil net profit every year to Weida for the next 3 years.
Overall this quarter's results is disappointing, especially its core manufacturing segment. If the growth in manufacturing does not increase or sustain, then investing in Weida will be less exciting although it has just ventured into property and has good prospect in telecommunication tower business in Sabah.
Many people overlook Weida as a potential beneficiary in the RM1.5bil telecommunication towers projects in East Malaysia announced in Budget 2014, as Weida has a strong presence in Sabah.
I will keep Weida in my stock watch list, but most probably will not put money in it until subsequent quarter's results, as history suggests that its revenue & profits tend to fluctuate a lot.