We are turning cautious on Instacom given that two of its major shareholders had pared down their interests in the company. With limited visibility on contract flows and to err on the side of caution, we cut our FY13/FY14 forecasts by 14%/29% respectively. We downgrade the stock to NEUTRAL (from BUY), with a lower MYR0.29 FV (from MYR0.51), based on a 10x FY14 P/E. * Share/warrant selldown. In the last two months, the public faces of Instacom – Anne Kung, CEO and Thomas Ngu, director of sales and project management – had reduced their stake in the company. We gather that Anne Kung’s 14.5% equity interest in Instacom is unchanged, while Thomas Ngu pared his stake to 7.8% (from 14.5%). However, both had disposed of all of their warrants (collectively, 29% or 102m units). The other two major shareholders, Chan Chuck Yan and Wong Say Khim, did not participate in the selldown. * Selldown by insiders. We are alarmed by the recent development as Anne Kung and Thomas Ngu are important individuals at Instacom from the operating perspective. When contacted, they were not able to provide satisfactory explanations. Hence, we are adopting a cautious stance on the company and its prospects going forward. * Forecasts. Given limited visibility on the group’s contract flows and erring on the side of caution, we remove the fibre contribution of MYR25m-26m and MYR205m worth of jobs from 1M Utama SB from our financial model. We cut our FY13/FY14 forecasts by 14%/29%, as these job wins in 2H13 as guided by Instacom have yet to materialise. * Risks. Key risks are: i) growing trend among telcos to share their networks, ii) regulatory and execution risks in setting up its infrastructure assets, and iii) a slower-than-expected takeup of its services. * Valuation & recommendation. Following the downward revision in our forecasts and ascribing to a lower P/E multiple of 10x (from 13x) on FY14 EPS, we derive a lower MYR0.29 FV (from MYR0.51). We incorporate a higher discount factor of 50% (from 30%) against the target P/Es of local mobile operators and regional/global tower-related companies of about 20x to reflect its limited business visibility. All in, we downgrade the stock to NEUTRAL (from Buy).
KHIND （机兴控股，7062，二板消费产品股）上星期四（11月14日）公布了超强业绩，接着第二天股价便开始狂飚，今天更一路走到RM3.06。 可是这份业绩，我左看右看，始终觉得有点不妥。 首先，首9个月虽然净利达到1306万7000令吉，每股净利为32.62仙，比去年同期增加95.17%，确实令人振奋！ 可是，如果我们若拿去年12月31日止的业绩至目前的业绩来做个总结，我们会发现，该公司首9个月的现金只增加178万3000令吉，总现金共有3624万6000令吉。 再来，同一段时间该公司的库存（Inventories）增加了1142万3000令吉，应收帐款（Trade and other receivables）增加了1028万7000令吉，长短期借贷（Loan and Borrowings）也增加871万9000令吉。 公司赚了钱却赚不到现金，反而累计了一堆的库存（共6740万令6000吉）和顾客所欠的帐款（共7405万3000令吉），公司的银行贷款也增加了（共7542万4000令吉），我个人认为其实不是个好现象。 当然，现在说公司的财务状况有问题还言之过早，如果接下来管理层能够改善库存、应收帐款和负债，那又另当别论。 免责声明： 以上公司财务分析，纯属本人个人意见和观点。