George Kent rises 3.9% on better FY16 prospects from LRT, metering segment

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KUALA LUMPUR (April 22): Infrastructure engineering firm George Kent (M) Bhd rose as much as 3.9% today, possibly on expectation it will perform better in the current financial year ending Jan 31, 2016 (FY15).

Yesterday, George Kent executive director Bernie Ooi said the firm is expecting a better FY16, driven by the RM1.1 billion Ampang light rail transit (LRT) extension works contract and the expansion of the firm’s metering segment.

At 2.45pm today, George Kent (fundamental: 1.4; valuation: 1.4) was up 4 sen or 3.2% to RM1.31, on trades of some 750,400 shares. The current price gives it a market capitalisation of RM387.53 million. The stock had earlier reached a high of RM1.32.

A dealer who declined to be named, told theedgemarkets.com the uptick in the share price today could be due to the expectation of a better financial performance in FY16.

“It is probably due to that piece of news,” he said over the telephone, adding he was unsure if the stock has been fully valued.

According to him, the firm’s order book has to be taken into account, among other factors. Currently, the firm’s order book stands at RM1.5 billion.

In its FY15, net profit dropped 22% to RM28.07 million, from RM36.21 million a year ago; while revenue declined 30% to RM353.16 million, from RM506.30 million.

InterPacific Securities’ remisier Sam Ng said George Kent’s price earnings ratio is “reasonable”, and that he felt the counter has been keeping a “low profile”.

(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.)