NRA Research Report – 3Q17 Results Update
Excerpt from report:
Overweight
Current Price S$0.135
Fair Value S$0.300
Up/ (downside) 122%
Maintains Profitability with tight cost control
Commendable 9M17 performance. Year-to-date, Regal performed commendably as gross profit rose from RM23.5m in 9M16 to RM32.4m in 9M17 (+38%), despite revenue dropping by 7%. The lower revenue could be due to fewer completed projects in 2017, whilst the company maintained tight cost control which raised gross margin from 20.7% in 9M16 to 30.5%in 9M17. For 3Q17, gross margin was still a respectable 27.5%, versus 31.5% in 1Q17 and 32.8% in 2Q17 (averaging out to 30.5%).
9M17 PATMI of RM3.3m was equivalent to 73% of our previous forecast of RM4.5m for the full year and can be said to be within expectations.
We expect the company to perform better in 4Q17 compared to 3Q17, as the RM has appreciated by about 2% to 3% against the SGD from the end of September to-date, leading to potential translation gains.
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