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Monday, December 22, 2014

Pintaras Jaya: Mana Contracts?

Recent quarter report of Pintaras Jaya mentioned that there is some projects just started. It caused the profit margin dropped due to the revenue recognition method of percentage of completion. I would expect the profit margin for the next 1 or 2 quarters will pick up back.

Table below shows the contracts awarded to Pintaras Jaya group for the past one year as announced by the group in Bursa website. 

The group last announced a contract won was back to June this year. That was roughly half year ago. 

Financial year of Pintaras is at the end of June. When we step into 2015, the group only left 3 to 4 job orders on hands. Without doubt, FY2015 will be another good year for the group as the total value of the contracts works in FY2015 easily surpassed its result in FY2014.

Management mentioned that they are quite comfortable with the amount of work they are having now and wish to focus on these jobs first before replenish their order book once more work has been done. Biggest challenge is still their human resource. 

Tender book is around RM1-2b. But that is only tender. With the recent drop in crude oil price which directly affected government's revenue and budget, the planed expenditures and construction works may be delayed or worst case being cancelled. In addition, the property development segment is expected to be slowed down gradually.

It's undeniable the fundamental of Pintaras Jaya is good, very good indeed. But being in a construction industry, the group must go through some cyclical periods and I'm confident that the group will have the ability to survive given the solid balance sheet.

But investors invest for future. Without much contracts on hands after the new year, the earning visibility is not there. 

I wish and hopefully see some contracts announcement soon.

So, mana contracts, Pintaras?

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