Kevin Scully, chairman of NRA Capital. Photo: CompanyThese articles were recently published on www.nracapital.com, and are republished with permission.Straco, one of my Stock Picks yield, has delivered a strong set of Q3-2013 results.
Key highlights in the results are:
a) Q3 2013 revenue rose 48% to S$30.5mn
b) Pretax profit rose 67% to S$22.6mn while net profit was higher by 72% to S$15.9mn
c) Unlike Q2, Q3 results were not boosted by other income, ie exchange gains and the proceeds from the sale of property
d) Gross cash or, in this case, net cash as they have no debt was S$101.1mn
e) Q3 EPS was S$1.81 cents compared to S$1.05 cents in the corresponding period in 2012 while 9 month EPS was S$3.38 cents
f) NAV per share as at 30 Sept 2013 was S$0.182
g) Visitor arrivals at Q3-2013 was higher by 33.4% to 1.26mn with Shanghai Ocean Aquarium seeing growth of 48.6% while Xiamen Underwater World saw growth of 18.9%.
Screenshot of Shanghai Ocean Aquarium website www.sh-aquarium.com/enCommentary
Overall, the results were much better than expected as I was only looking for organic growth of 10-20% for its business.
I still like the stock which remains one of my Stock Picks – please read my Stock Picks yield section to find out more about my price target and dividend expectations for Straco for 2013.
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Midas reported a strong set of Q3-2013 results with net profit of RMB16.8mn compared to a loss of RMB6.5mn in the same quarter in 2012.
Key highlights of the results are:
a) revenue rose 48.5% to RMB301.0mn in Q3-2012 over Q3-2012
b) associate profits were RMB10.9mn in Q3-2013 compared to a loss of RMB6.9mn
c) Pretax profit for Q3-2013 was RMB20.4mn compared to a loss of RMB1.6mn while nine month to Sept 30, 2013 pretax profit was RMB35.6mn compared to RMB26.7mn, a gain of 33.3%
d) Net profit was RMB16.8mn compared to a loss of RMB6.5mn in Q3-2013 while nine month net profit was RMB25.0mn compared to RMB10.4mn a gain of 141.2%
e) Gearing has increased to RMB2.33bn up 62% with a gross gearing ratio of 79% with a net gearing ratio of 49%....still manageable especially if earnings continue to pick-up.
f) EPS per share for Q3-2013 is RMB cents 1.35 while NAV as at Sept 30, 2013 was RMB cents 242 or about S$0.48
Midas CEO Patrick Chew (center) receives award for Most Transparent Company in Chemical & Resources at the recent SIAS Investors' Choice event. NextInsight file photoManagement’s forward looking statement was moderately optimistic. “Following the PRC Government’s pledge to speed up railway investment, China Railway Corporation (“CRC”), China’s national railway operator, said in October that railway fixed asset investments for the first nine months of the year reached RMB369.7 billion which was a 7.4% increase from the previous corresponding period. CRC had also earlier announced that it will be raising annual investments in fixed assets to RMB660 billion in 2013.
"According to the country’s 12th 5-year plan for railway development, China will have around 123,000 km of railways in operation by 2015, including 18,000 km of high-speed railways and an express railway network totaling 40,000 km in length. The CRC plans to have approximately 5,500 km of new railway lines put in operation by end 2013, extending the size of the rail network to over 100,000 km, while the high-speed rail network will exceed 10,000 km.
"Such positive developments are expected to benefit industry players and the Group remains moderately optimistic on the outlook of China’s railway industry over the mid to long-term. Further, the Group’s order book has also received a healthy boost of approximately RMB433.6 million between July and October, backed by contracts from international and PRC customers, as well as the Group’s first high-speed train contract since 2011.”
Commentary
The waiting is finally beginning to pay off for Midas. I still like the stock and it remains on My Stock Picks list. After the freezing of train contracts by the Chinese Govt since the Shanghai train accident and corruption charges against the Chinese rail minister which caused Midas’ revenue to drop sharply as well as its share price, the Chinese Government has finally started to issue the long awaited high speed train contracts in August 2013.
The company expects more to come and we believe that the continued award of municipal rail contracts and high speed contracts, especially the latter will boost the share price to my price target (see my Stock Picks section) for more details.
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