Brokers' Take / Analyst Reports

Thakral Corporation, Mar 19 close: S$0.095

Mar 20, 2007
The Business Times

PHILLIP SECURITIES RESEARCH, Mar 20

THAKRAL'S 9M/FY 2007 results came in weaker-than-expected, due mainly to some allowances made in the last quarter (FY 2007 comprises nine months' contributions, due to the change in FY end from March to Dec). Revenue came in at $166.5 million, declining 47.9 per cent against 9M 2006 revenue of $319.6 million, as heavy competition and supply issues continued to take its toll on sales. Gross profit margin took a severe beating in Q3, falling to an abysmal 0.2 per cent. As a result, GPM for the year fell to 5.7 per cent from 7.6 per cent in the corresponding period last year.

We have adjusted our top line projection for FY 2007 (CY 2007) upwards to $227.1 million on the back of stronger property sales, while profit after tax and minority interests (PATMI) has been revised downwards to -$3.5 million to reflect the effect of lower margins. We have also introduced our FY 2008 projection, where we expect Thakral to break even with modest net earnings of $0.7 million on revenue of $301.6 million. Our P/BV peg has been also raised from 0.9x to 1.0x to credit the tidied balance sheet. Maintain 'hold' with a fair value estimate of $0.10. - HOLD

Compiled by CONRAD TAN