KUALA LUMPUR (May 13): Engineering specialist George Kent (M) Bhd rose as much as 5.04% after it was chosen as Insider Asia’s stock of the day and featured on The Edge Financial Daily today.
At 3.32 pm, the counter pared some gains and eased to RM1.23, up 4 sen or 3.4%, with 549,000 shares done.
In the daily, Insider Asia said George Kent (fundamental: 1.4; valuation: 1.4) should continue to do well, based on its track record and ability to win projects.
“For instance, the company – which specialises in water-related projects – made inroads into the transport and railway construction sector when its joint-venture with Lion Pacific was awarded the RM1.08 billion Ampang Line LRT Extension project in July 2012. The project is targeted for completion by end-2016,” it added.
In October 2014, George Kent secured the Kuala Lipis Hospital Phase 2 project worth RM57 million from the Ministry of Health.
Together with its partner, Malaysian Resources Corp Bhd (MRCB), Insider Asia said George Kent is one of six companies short-listed to be the project delivery partner for the RM9 billion LRT 3 project, of which the project award is expected by mid-2015.
On the manufacturing front, Insider Asia said the company is in the midst of doubling its water meter production capacity.
“It has a healthy balance sheet, with net cash of RM107.8 million or 36 sen per share, equivalent to 30% of its current share price at RM1.19. Book value stands at RM0.96 per share. Excluding cash, the stock is trading at modest single-digit trailing 12-month P/E of 9.1 times,” it added.
Meanwhile, dividends for the financial year ended Jan 31, 2015 (FY15) totalled 5.3 sen per share, including the yet to be paid final dividend of 2.1 sen per share, translating into fairly attractive yield of 4.5%, it said.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)