GAMUDA break above with good volume

Technical Outlook
Following my post last week, GAMUDA share price has been steady, closing at high of RM3.95(1/7/2011). Therefore, its 1st resistance RM3.84 broke and now turn support. Next resistance RM3.98, then it should be challenging its long term high of RM4.28.

Friday's break out seems promising to me. It has been support with good volume, and positive MACD crossover from just above 0. MA(14d) also crossover MA(100d), which some people like to translate it as "Golden Crossover". The party may have just started!!

However, break above RM3.98 is crucial, else we might see "Head and Shoulder", which is not good.

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GAMUDA on track to a good financial year

FY30/4/2011
Financial Result
Compare to 3Q10, company revenue up 21% from RM511.2m to RM621.2m recorded for 3Q11. PBT has also increase 55% from RM101.8m to RM158.4m. The increase in profit before taxation for current quarter resulted by higher contributed from all divisions.

For 9 months period, company recorded revenue PBT of RM1862.6 and RM393.4 respectively.
Engineering and Construction division contribute 70% of company's revenue, 26% of PBT
Property Development division contribute 25% of revenue, 28% of PBT
Water and Expressway division through its associate company, contribute 46% of PBT

As we can see, water and expressway division are the goose that can lay eggs for the company. Its essential for GAMUDA to retained them.

Technical Outlook
Gamuda good financial result need some time to reflect in its share price. Immediate resistance is RM3.84, then RM3.98. MACD show some positive signal.

Stock Valuation
GAMUDA close at RM3.75 today(24/6/2011). Base on EPS(ttm) of  RM0.184, its trading at 20.4x. As a bluechip construction company, i think the price is fairly valued.

Overall
Prospect for the company is very promising in the medium term. Couple of projects in each particular division will keep them busy. With a good quarter result announced, it'll soon reflect on its share price. Its an opportunity to ACCUMULATE while its still steady.

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MAMEE propose capital reduction and repayment

MAMEE share suspended for two trading days from 7th April 2011 pending for an announcement. Company gonna propose capital reduction and repayment....i call it "Privatization".

Company undertaking a selective capital repayment exercise under Section 64 to all shareholder, other than  Non-Entitled Shareholders.

The propose capital reduction and repayment will be funded by this 71.9% Non-Entitled Shareholder by way of an advance or/and borrowing.

Proposed cash repayment per share is RM4.39, arrive after consider 5days, 1month, 3months average price of MAMEE share. Based on MAMEE NTA of RM1.71, its propose price-to-book ratio is 2.57times.

The reason given by the board for this proposal is :
1. Concern about the trend of increasing raw material prices and forex volatility.
2. Substantial capital expenditure may needed to improve productivity and expand capacity.
3. Need higher borrowing, which will affect dividend payment capability in immediate term.
4. MAMEE share thinly traded.
    "lol, blame people don't stir up(goreng) the price "

All after all, MAMEE is a very highly rated company in my list. It doesn't disappointed me since i start researching them. Link.

I personally do not welcome this proposal, as we'll get kick out from a good partnership. However, MAMEE proposed cash repayment price RM4.39 is about 22% premium of closing price as of 6th April 2011(RM3.60). For the good faith of minority shareholder(28.1%) i think Non-Entitled Shareholder are generous and fair.

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