NAIM is Firing Up on Four Engines just like the 747 Jumbo Plane

February 7, 2019 By Calvin Tan Smart Investment

Hi guys,

Today Dayang suddenly spiked up due to the momentum triggered in O&G interest in Carimin.

And Naim followed close behind in its price surge

But Naim has 3 other engines of growth even without Dayang

So what are the Other 3

NAIM is Firing Up on Four Engines just like the 747 Jumbo Plane

Author: calvintaneng   |    Publish date: 

Hi guys,

Today Dayang suddenly spiked up due to the momentum triggered in O&G interest in Carimin.

And Naim followed close behind in its price surge

But Naim has 3 other engines of growth even without Dayang

So what are the Other 3?

The other three are Pan Borneo Highway, Construction & Real Estate

Altogether NAIM has four engines of growth like 4×4 cylinders firing now. The macro picture looks good

 

Now let’s take a closer look at the micro level

 

1)  The Latest Table of content gave a Resounding Turnaround

 

UMMARY OF KEY FINANCIAL INFORMATION
30 Sep 2018
INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR
CORRESPONDING
QUARTER
CURRENT YEAR TO DATE
PRECEDING YEAR
CORRESPONDING
PERIOD
30 Sep 2018
30 Sep 2017
30 Sep 2018
30 Sep 2017
$$’000
$$’000
$$’000
$$’000
1 Revenue
178,760
53,654
438,949
260,950
2 Profit/(loss) before tax
33,865
-86,065
31,128
-118,094
3 Profit/(loss) for the period
30,530
-94,828
24,505
-130,385
4 Profit/(loss) attributable to ordinary equity holders of the parent
30,323
-95,014
23,398
-130,949
5 Basic earnings/(loss) per share (Subunit)
12.80
-40.10
9.87
-55.27
6 Proposed/Declared dividend per share (Subunit)
0.00
0.00
0.00
0.00
AS AT END OF CURRENT QUARTER
AS AT PRECEDING FINANCIAL YEAR END
7 Net assets per share attributable to ordinary equity holders of the parent ($$)
4.2800
4.1800

 

All revenue, profit & Nta increased from last year quarter

 

2) NAIM IS SELLING AT HUGE DISCOUNT TO NAV

At 52.5 sen with NTA of Rm2.40 (adjusted 2 for 3 bonus) is selling at almost 80% discount to NTA

Naim at its recent peak was over Rm6.00 & now price has fallen by 90% near historic low….making this a great bargain

 

3) POWRFUL EARNINGS PER SHARE (EPS)

So good. Naim has not only High NTA it has also got Powerful Earnings

And this is not just a one off

Refer to Qtr result

The Group recorded higher revenue of RM438.9 million for the period under review, as compared to RM261.0 million reported in the corresponding period of 2017. The increase was contributed by both Property and Construction divisions, which recorded a 78% increase in their revenue when compared against that achieved in the corresponding period of 2017, due to increased work progress and additional new property sales [see Note 17.1 (b) for details].

Property segment recorded an increase in its revenue and profit during the current period under view. The increase was partly contributed by increased work progress achieved. Higher new sales of about RM100.6 million (January to September 2017: RM92.9 million) also had led to the increase in the property revenue and profit during the 9-month period.

17.2 Review of performance of major associate Our associate, Dayang Enterprise Holdings Bhd. (“DEHB”), reported an unaudited profit after tax attributable to owners of about RM66.5 million, against a loss of RM89.7 million registered in the corresponding period of 2017. The improvement in the DEHB performance wasmainly due to higher maintenance work orders performed during the period under review.

So from here we can see that all three

Construction

Property

Oil & Gas (Dayang)

are doing well

Resulting is a nice 12.8 sen profit this last quarter

 

4) PAN BORNEO HGHWAY

This single connecting highway will increase the Value of NAIM LANDBANKS By manifold

In the 1950s One Acre Land in Shah Alam was worth only Rm5,000. After KL – Klang Federal Highway was built the Lands in Shah Alam increased by manifold.

Like the wild wild West of USA in its pioneer days those lands were given free to settlers. Same goes for those Lands in Pahang in early days. After the KL – Karak Highway was built land prices soared in Pahang. And the PLUS- North South Highway unlocked the land Value from Perlis to Perak… from Seremban to the Southernmost part of Johor.

Since NAIM is the Largest Real Estate Land Owner in Sarawak it stands to gain the most in Land Value appreciation

And spearheading its future

See

Naim Holdings Berhad has accepted the award of Pan Borneo Highway Project which is the package work for Pantu Junction to Batang Skrang in Sarawak. The contract is estimated to worth at least RM 1.1 Billion for Naim Holdings Berhad.

 

5)NAIM CASHING IN ON AFFORDABLE HOUSING

KUCHING: Naim Holdings Bhd, which has a huge landbank in Sarawak’s major towns, expects to build at least 1,000 units of affordable houses in three years to cash in on market demand.

Managing director Datuk Hasmi Hasnan said Naim’s main focus was to build more affordable houses in Miri, Kuching and Bintulu where it has over 2,500 acres of prime land.

The land has an average book value of RM170,000 per acre and RM4 per square foot.

Hasmi said Naim had in the past several years switched to undertaking high-end residential property projects like high-rise condominiums because the government was very aggressive in building affordable houses like 1Malaysia People’s Housing or 1PRIMA nationwide.

He said as the new Pakatan Harapan government would like to see the private sector’s participation in providing affordable homes, “we see we can play our role here”.

Hasmi said Naim had received good market response to its newly launched affordable housing scheme Primrose Terraces in SouthLake Permyjaya in Miri.

“The single-storey terrace houses there are offered at about RM300,000 each,” he told StarBiz after the company’s AGM here.

NOTE: NAIM COST OF LAND ONLY RM4 PER SQ FT

ONE ACRE LAND CAN BUILD 10 HOUSES OR RM3 MILLIONS

THE PROFIT WILL BE PHENOMENAL

6) PROXIMITY TO BRUNEI (NAIM’S MIRI LANDBANKS

NAIM’S HOUSING ENCLAVE IN MIRI IS ONLY 2 HOURS BY CAR TO BRUNEI

It takes more than 8 Hours by Car from Brunei to Kota Kinabalu

Just like the Strong Singapore Dollar the Brunei Dollar is worth Rm3.00 each

So expect NAIM’s Properties to sell well in Miri

 

 

7) NAIM ALSO HAS INVESTMENT IN DAYANG. For that we quote a fellow i3 forumer’s post:

Author: Ekor Harimau   |    Publish date: 

 

There is no misleading or bullshit here, so I will put a link there for your reference. I list down only 5 reasons why Dayang Enterprise is a good proxy for Carimin Petroleum, especially for now.

1) 84% vessel utilization rate. Yup, it is 84%

How much the vessel utilization rate in March 2018? It was only 27%. Then it had increased to 70% in Jun 2018. Now the vessel utilization rate of Dayang is as high as 84%. What it means by such high vessel utilization rate? It means the worst is over for Dayang, so they had recorded very good results in second and third quarter 2018.

2) Secured multiple MCM contracts last year, NOT only one

Yes, multiple MCM contracts has secured last year. These projects are secured from Petronas Carigali and other oil & gas players in local industry. This year they will bid for the contracts worth RM600 million, both local and overseas.

3) Sustainable EPS but share price lagging behind

As you know, Carimin Petroleum had been shot up from RM0.205 to RM0.85 just in few months. And for Dayang, it has ranged from RM0.50 to RM3.90 within this 5 years. Too early to say it will return to its glory time but I’m sure that the downside risk is very very very limited now. (The important thing must say 3 times)

4) The group “firmly believe” the worst is over

“We firmly believe that 2018 will be a real turnaround for the group after experiencing poor results over the past two financial years…” You can read this statement on their latest quarter prospects. Looks like they are very confident that they will turnaround this year.

5) Improving balance sheet in next few quarters/years

Dayang’s management very confident that their balance sheet will continue to improve “significantly” as the impressive financial performance in the third quarter has indirectly demonstrated the financial discipline undertaken to turn around the company. 

If you missed the Carimin Petroleum, maybe Dayang is another good proxy to you. But please do your homework before buying. Please feel free to comment. Thank you for reading.

 

 

So what should be the Intrinsic Value of Naim

 

Uncle KYY has calculated the price of carimin due to its one quarter result

And i quote 

 

Carimin: Waiting for Correction Strategy – Koon Yew Yin

Author: Koon Yew Yin   |    Publish date: 

Mon, 4 Feb 2019, 12:30 PM

“”In my previous article namely Carimin-is doing what business, I said that just based on its 1st Q EPS of 5 sen, I have projected the company will most likely report 4 X 5 = 20 sen EPS and its share price can be selling at Rm 2.00, equal to P/E 10.””

 

In the simplistic (simpleton) way of projecting carimin share price at P/E 10 Kyy used the forward EPS of 5×4 for carimin

Should we use this to calculate NAIM?

Then it will be 12.8 x 4 = 51.2 sen

And if PE 10 then NAIM should be Rm5.20 target price?

Of course not! This is not maths. This is madness

 

 

BEST REGARDS

 

Calvin Tan

Singapore

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