Saturday, 12 December 2015

Eupe Corp

Small Market Cap, Huge GDV

Author: Icon8888   |   Publish date: Sun, 12 Apr 2015, 01:07 PM



Executive Summary

(a) Driven by a whole host of factors, the Malaysian property industry has not been doing well since second half of 2014. Instead, many investors shifted their attention to export oriented companies.

(b) However, I have not given up entirely on the industry. I always have a soft spot for small cap property developers. Unlike big developers with multi billion revenue and / or net profit to worry about, small developers can survive by getting one or two small projects right. Small market cap is also more conducive for high growth. 

(c) I have been eyeing Eupe since April 2014 when it announced that it is venturing out of its home turf, Kedah into Klang Valley. They bought three small parcels of land in Bangsar South, Cheras and Seputeh respectively. This has generated some interest among investors. However, I have decided not to invest in the stock at that time as I believed it was still early stage.

(d) Fast forward to 2015. The company recently started advertising in newspapers about their projects in Bangsar South and Cheras. I took a closer look and discovered that both projects are located near LRT stations. It is too early to say how well they will do. But I guess being closed to LRT stations does make things a bit easier.

(e) The company has 50% and 70% equity interest in Bangsar South and Cheras project, with GDV of RM460 mil and RM260 mil respectively. As such, effective GDV for the two projects is approximately RM412 mil. On top of that, the group has 1,000 acres landbank and several development projects in Kedah and also few acres of land in Seputeh, KL.

(f) I bought into Eupe because of its potential. As at the date of this article, the company has market cap of slightly more than RM100 mil. It reported net profit of RM11.2 mil over past 12 months. If the projects work out well, there is decent chance that profit will grow by leaps and bounds (I will leave it to your imagination). 

(g) If you are interested in this stock, I would suggest that you take your time to slowly build up position. There is no need to hurry to chase the stocks. It will easily take another, let's say, 9 to 12 months to see development profit slowly trickling in.

BUY AT OWN RISK

Eupe Corp Bhd (EUPE) Snapshot

Open
0.84
 
Previous Close
0.83
Day High
0.84
 
Day Low
0.84
52 Week High
04/23/14 - 1.10
 
52 Week Low
03/2/15 - 0.70
Market Cap
107.5M
 
Average Volume 10 Days
40.7K
EPS TTM
0.09
 
Shares Outstanding
128.0M
EX-Date
11/11/14
 
P/E TM
9.3x
Dividend
0.02
 
Dividend Yield
1.79%











The group has strong balance sheets. With net assets of RM281 mil, loans of RM47 mil and cash of RM19 mil, net gearing is approximately 0.1 times only.


Annual Result:
F.Y.Revenue ('000)Profit Attb. to SH ('000)EPS (Cent)PEDPS (Cent)DYNAPS
TTM184,18211,5999.069.280.00-2.1900
2014-02-28186,11912,92310.107.732.002.562.1300
2013-02-28146,63814,84511.604.49--2.0500
2012-02-29143,0527,7716.078.57--1.9300
2011-02-28124,1664,9803.8912.86--1.8800
2010-02-28108,6853,5912.8118.15--1.8400

Quarter Result:
F.Y.QuarterRevenue ('000)Profit before Tax ('000)Profit ('000)Profit Attb. to SH ('000)EPS (Cent)DPS (Cent)NAPS 
2015-02-282014-11-3040,8786,8663,3923,4352.68-2.1900View Source
2015-02-282014-08-3146,6694,1113,5063,5442.77-2.1700View Source
2015-02-282014-05-3146,6021,5318157310.57-2.1400View Source
2014-02-282014-02-2850,0335,6714,0433,8893.04-2.1300View Source
2014-02-282013-11-3052,7056,3393,4753,2432.53-2.0800View Source
2014-02-282013-08-3146,6815,3314,0524,2443.32-2.0700View Source
2014-02-282013-05-3136,7002,7091,7741,5471.21-2.0600View Source
2013-02-282013-02-2831,2195,7043,2693,1032.42--View Source Remarks

(The Weave, Cheras. GDV RM260 mil)

(The Weave, Cheras)

(Novum, Bangsar South. GDV RM460 mil)







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