MTD WALKERS - KAPI

[RPPATop contributor]

MTD Walkers PLC is a well-diversified construction & Engineering company having over 160 years of history. The company specializes in civil engineering, engineering services and electricity power generation sectors which have promising growth potential on the back of broader economic, political and social development of the country.

following the acquisition by MTD Capital in 2006, a leading Malaysian based infrastructure development company with offices in thirteen countries, around the world. With a history of over 160 years the company engages in Civil & Mechanical Engineering, Piling of foundations and other related earthwork, Construction of roads and highways and providing other engineering services, Provide ship repairing & marine engineering services and operates 30 MW HFO power plant in Jaffna Peninsula supplying power to the Ceylon Electricity Board (CEB)

MTD Walkers Group Companies

Walker Sons & Company Limited
Walker Sons & Company Engineers (Private) Ltd
Walker Sons & Company (Distributors) Limited
Walkers Piling (Private) Ltd
MTD Walkers Projects Limited
CML-MTD Construction Limited
Northern Power Company (Private) Limited
Colombo Engineering Services (Private) Limited

Financials as at 31/12/2014
http://www.cse.lk/cmt/upload_report_file/444_1424689570906.pdf

4th QTR financial is due after the successful rights issue in 22/01/2015.

NAV EX RIGHTS as at 31/12/2014 Rs.50.16
Adjusted P/E (EX rights) as at 31/12/2014 7.30 times (current price 57.50)

What do ya all think guys about Mr.KAPI, For a change I did bit of analysis.

[sashimaalTop contributor]

Thanks for starting this thread RPPA. I wanted to get into this share but upto now couldn't.

This was one of the most favored shares not so long ago and Rs 100 was discussed as a long term target.

After the rights announcement the price came down with the dilution and now seems picking up again.

Do you think now is a good entry point?

[RPPATop contributor]

Thanks for starting this thread RPPA. I wanted to get into this share but upto now couldn't.

This was one of the most favored shares not so long ago and Rs 100 was discussed as a long term target.

After the rights announcement the price came down with the dilution and now seems picking up again.

Do you think now is a good entry point?

Why not have a go & see. trading PE way below 10 & Rights issue funds will also yield returns than before. So i am very optimistic about future prospects.

and Construction & infrastructure sector continue to be green until 2020

[sashimaalTop contributor]

Ok, will try to target a ASI correction as an entry point - if i don't run out of credit that is

Thanks for starting this thread RPPA. I wanted to get into this share but upto now couldn't.

This was one of the most favored shares not so long ago and Rs 100 was discussed as a long term target.

After the rights announcement the price came down with the dilution and now seems picking up again.

Do you think now is a good entry point?

Why not have a go & see. trading PE way below 10. & Rights issue funds will also yield returns than before. So i am very optimistic about future prospects.  

[LeonTop contributor]

+ like RPPA
Good to see such analysis in the forum. If my memory s working well this had a nice turnaround.From a loss making to a profitable one.
Looking the current trend 65.00 is a possibility. What do you say techs??

[sashimaalTop contributor]

RPPA, what are the cash cows in the business? (as there are many companies under it)

[RPPATop contributor]

RPPA, what are the cash cows in the business? (as there are many companies under it)

Need to analyse more. As per my knowledge following are the ones

Walker Sons & Company Engineers (Private) Ltd
Walkers Piling (Private) Ltd
CML-MTD Construction Limited
Northern Power Company (Private) Limited

[sashimaalTop contributor]

Thanks RPPA , +

RPPA, what are the cash cows in the business? (as there are many companies under it)

Need to analyse more. As per my knowledge following are the ones

Walker Sons & Company Engineers (Private) Ltd
Walkers Piling (Private) Ltd
CML-MTD Construction Limited
Northern Power Company (Private) Limited

[smallvilleTop contributor]

Timely one RPPA..

Here's the tech analysis from me..

If KAPI breaks 57.50, its gonna show a buy in weekly charts with MACD & ADX.

[RPPATop contributor]

Thanks for the Chart SMALL.

Rep+

[sashimaalTop contributor]

Thanks Small for the descriptive Tech chart , +

[smallvilleTop contributor]

Its better we renew our interest in this.. I see much potential... If 60 is broken, next resistance is 65.70...

Im not expecting KAPI can do magic with financials, but technically interest is there.. And its being pushed down sometimes to collect.

See the RSI is 54 and goin up, ADX already crossed indicating positive strength.. Im defa in..

[slstockVeteran]

+ rep

Comments :

If one is going longterm with this, I would be a little careful to monitor earnings for next few quarters and dig deeper to their project contract structure. ( I have not dug deeper).

The new government ( if it stays the same) will not be construction oriented heavily like the last.

Also don't forget the right issue dilution of earning/ assets

For shorter term trade, I guess it is covered by smallville.
KAPI is illiquid and there can be opportunities due to that if correct entry exit.

[Market loverTop contributor]

Tks RPPA and small and slstock. Likes from me

[malanp]

Construction industry always volatile, they need a higher EPS to justify the price because income is not steady.current price is ok for Rs. 7 annual EPS. unless somebody push up there is a very little chance to move up based on valuation..

[pathfinderTop contributor]

Good post RPPA +

Recent right issue brought price down and some party played on it.
Showed some interest last few days.Agree with you Small 60 is a ressistance.need some volume to break it.
If reports do the need it can test next level of 71

[smallvilleTop contributor]

Construction industry always volatile, they need a higher EPS to justify the price because income is not steady.current price is ok for Rs. 7 annual EPS. unless somebody push up there is a very little chance to move up based on valuation..

Point taken.. That's why I hinted I dont expect magic with financials.. Its a + point if they do good.. But this is pushable with interest.

[xmartTop contributor]

thanks RPPA for initiating the good discussion.

@shasi, for the cash cow question i think i have an answer since i have followed this business closely (not the stock)

as all of you know they started as machinery manufacturer for plantation work in 1840 and with the prevailing infrastructure development projects they moved in to Engineering in 1900. after the Independence and mega hydro and development projects they identified piling as a gray area yet to be solve and they start piling on 1981.

in 2006 walkers acquired by MTD group and the it start to expand exponentially but systematically to the very ends of engineering. during post war development time and during war they have provided northern power, highway construction, ref & ventilation.

in 2014 they moved in to real state development. soon they will penetrate to marine industry and renewable power sectors.

most important question one should ask is not "how much the EPS for profit" but "how did they manage to turnaround and make huge profit".

it is MTD group management that change the direction of KAPI from speculative category to strong fundamental and growth category.

one cannot compare KAPI to AEL. Sumal is a con artist (well, a gentlemen who start from the basement at lucky plaza and worked hard to build the Access.) but they need political connections always. i would much prefer the KAPI approach to the business.

Engineering is the cash cow for KAPI. it is not just roads and bridges, we need engineering services for day to day living though they are not visible.

[pathfinderTop contributor]

Good insight xmart +

[sashimaalTop contributor]

Thanks XMart , +

thanks RPPA for initiating the good discussion.

@shasi, for the cash cow question i think i have an answer since i have followed this business closely (not the stock)

as all of you know they started as machinery manufacturer for plantation work in 1840 and with the prevailing infrastructure development projects they moved in to Engineering in 1900. after the Independence and mega hydro and development projects they identified piling as a gray area yet to be solve and they start piling on 1981.

in 2006 walkers acquired by  MTD group and the it start to expand exponentially but systematically to the very ends of engineering. during post war development time and during war they have provided northern power, highway construction, ref & ventilation.

in 2014 they moved in to real state development. soon they will penetrate to marine industry and renewable power sectors.

most important question one should ask is not "how much the EPS for profit" but "how did they manage to turnaround and make huge profit".

it is MTD group management that change the direction of KAPI from speculative category to strong fundamental and growth category.

one cannot compare KAPI to AEL. Sumal is a con artist (well, a gentlemen who start from the basement at lucky plaza and worked hard to build the Access.) but they need political connections always. i would much prefer the KAPI approach to the business.

Engineering is the cash cow for KAPI. it is not just roads and bridges, we need engineering services for day to day living though they are not visible.

 

[Market loverTop contributor]

Great info Xmart. Tks

[RPPATop contributor]

Thanks for the additional infor' XMART.

[smallvilleTop contributor]

That's a good recap xmart.. very valuable. So even if real estate and road constructions fail to provide fuel, still engineering business is thriving..

[RPPATop contributor]

That's a good recap xmart.. very valuable. So even if real estate and road constructions fail to provide fuel, still engineering business is thriving..

That is why I have posted this thread by taking a chance,During a time where AEL struggling like hell. Because KAPI did not had serious issues like AEL with regard to Government contracts.

There for will wait till 4th QTR results of KAPI is released to have a understanding on the direction of KAPI. But if KAPI hit 65/- before they were released it is great bonus for KAPI holders.

[smallvilleTop contributor]

That's a good recap xmart.. very valuable. So even if real estate and road constructions fail to provide fuel, still engineering business is thriving..

That is why I have posted this thread by taking a chance,During a time where AEL struggling like hell. Because KAPI did not had serious issues like AEL with regard to Government contracts.

There for will wait till 4th QTR results of KAPI is released to have a understanding on the direction of KAPI. But if KAPI hit 65/- before they were released it is great bonus for KAPI holders.

Now that's a sweetener eh?

Good post on KAPI.. somewhat a forgotten one due to doubts with AEL failing to maintain a price. A lot of learning too..