Wednesday, September 18, 2013

XMH Holdings - Acquisition plans coming online (NRA)

XMH Holdings -
Current Price S$0.425
Fair Value S$0.49
Acquisition plans coming online

■ Expanding beyond the marine sector
XMH has acquired Mech-Power Generator Group (MPG) for S$17.4m. MPG has close to 30 years experience in manufacturing and assembling diesel powered generator sets (gen sets), with operations in Singapore and Malaysia. The acquisition will mainly help XMH develop its non-marine sector.


■ Raise forecasts and fair value
To account for MPG’s contribution, we raise our FY3/14-16 sales and profit forecasts by 15% to 33%. We raise our fair value to 49 cts from 34 cts, pegged to 12x FY14 PER (previously 10x FY14 PER) to account for stronger growth from the acquisition (FY13/14/16 net profit growth of 36%, 26% and 14% respectively), which translates into potential upside of 14%.

We upgrade the stock to Overweight as we believe that XMH will have the capabilities and opportunity to expand through this acquisition. We view this acquisition as prudent and fits well into its business. Additionally, we continue to like the group’s stable cash generating business and consistent dividend pay-out.

■ More Power to the Group
MPG supplies gen sets with power ratings from 20 kilovolt-ampere (kVA) to 2,500 kVA. These are huge gen sets that are typically used in shipyards and ports, data centres, airports and hotels. MPG’s current major project includes works with a major data centre here in Singapore, worth around S$40m spanning over two years. It assembles the gen sets in its 1.4ha factory in Iskandar Malaysia.

■ What’s in it for XMH?
The deal comes with a profit and NTA warranty. Total profits after tax and excluding extraordinary gains of MPG for FY03/14-FY03/15 should not be below S$6.9m, translating to S$3.5m per year of earnings contribution to XMH (XMH will only recognize Oct 13 to April 14 of MPG contributions for FY14).

MPG’s FY03/12 and FY03/13 profit was S$1.3m and S$1.7m, respectively. MPG will have to double its profits in FY14 yoy to meet its target.

■ We believe one plus one in this case, may end up greater than two
Doubling of profits for MPG will be challenging but achievable in our view. In order to achieve this target, MPG will have to leverage on XMH’s products and financing. With the strong balance sheet of XMH, this should greatly help in MPG’s expansion to clinch more projects where it was previously facing constraints.


Source/Extract/Excerpts/来源/转贴/摘录: NRA-Research,
Publish date:12/09/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock