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Home » Latest Notice » FundTech Radar (SCH) - 20th Feb 2018
FundTech Radar (SCH) - 20th Feb 2018

Good morning.

 

Today, we feature a note on SCH Group Berhad in our FundTech Radar – 20th Feb 2018. The company is in the business of distributing and supplying quarry industrial products, quarry machinery, spare parts for quarry machinery and manufacturing and distribution of quarry grill in Malaysia and South East Asia region.

 

Fundamental Stance

·         revenue and core earnings improved 19.3% and 29.4% year-on-year respectively in FY17

·         Its FY17 core PATAMI margin was up slightly to 4.7% (vs. 4.3% in FY16)

·         net gearing stands at a comfortable level of 0.005x

·         With the emergence of low-profile businessman Tan Sri Richard Koh Kin Lip and his business partner Liew Fook Meng, market expectations are high that the duo can elevate SCH like they did with Cocoaland

·         The take-off of several mega infrastructure and property projects are expected to boost the demand for quarry products as well as machinery & equipment market

·         venturing into the equipment rental business, with a profit guarantee of an aggregate PAT of at least RM15.5m for FYE June 2018 to FYE June 2020

·         proposed a private placement with an initial issue price of RM0.185 per share

·         currently trading at 36x 12-month trailing P/E, 34.6% discount to its 3-year historical average P/E of 54.8x

 

Technical Front

Still consolidating in a triangle formation but the odds appear to favour an upward trajectory

Resistances: 0.23/0.245/0.26

Supports: 0.20/0.19/0.185

 

The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.

 

This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.

 

20th Feb 2018

Disclaimers: This distribution is by CIMB Investment Bank Berhad (“CIMB”) in Malaysia only. The views are our own as of this date and subject to change. No further distribution is allowed without our prior written consent. CIMB, its related corporations, affiliates and business partners make no recommendation, offer or invitation to transact in any securities, futures contracts or other instruments. Please make your independent evaluation, consider your own investment objectives and financial situation and consult your own professional advisers before participating in any transaction.

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