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Maintain Outperform. We recently organised a 2-day non-deal road show for Ausgroup in Singapore and Hong Kong. Mr. John Sheridan, CEO, met institutional investors to elaborate on the group’s 1Q10 results, business operations, plans and sector outlook.
Our key takeaways were -
1) progressive pick up in revenue andearnings from 2QFY10;
2) easing margin pressures;
3) positive outlook in mineral resources and LNG sectors. We retain our Outperform rating and target price of S$0.96, still based on 13x CY11 P/E (average since listing).
Key catalysts for the stock include accelerated order wins and margin expansion. Key risks would be further strengthening of AUD$ eroding its competitiveness, clients’ deferral of projects and project execution risks which may swing quarterly earnings.
Order book remains strong at A$350m, A$60m secured YTD. The group has submitted A$600m worth of contracts YTD and will be tendering A$700m-1.1bn.
Notable tenders include a painting and insulation package for Pluto LNG, a A$200-300m fabrication package for Gorgon LNG and two fabrication and construction packages for BHP Billiton’s Rapid Growth Project 5 (RGP 5) in Western Australia.
Contract announcements for Gorgon LNG will be made in 4QFY10. We believe Ausgroup will be able to win some of the tendered packages based on the ability to supply local content. Benefits will flow through FY11 onwards.
Our order-win assumptions for FY10 and FY11 are A$400m and A$500m respectively. About 60% of FY10 revenues are secured back order book.
Our key takeaways were -
1) progressive pick up in revenue andearnings from 2QFY10;
2) easing margin pressures;
3) positive outlook in mineral resources and LNG sectors. We retain our Outperform rating and target price of S$0.96, still based on 13x CY11 P/E (average since listing).
Key catalysts for the stock include accelerated order wins and margin expansion. Key risks would be further strengthening of AUD$ eroding its competitiveness, clients’ deferral of projects and project execution risks which may swing quarterly earnings.
Order book remains strong at A$350m, A$60m secured YTD. The group has submitted A$600m worth of contracts YTD and will be tendering A$700m-1.1bn.
Notable tenders include a painting and insulation package for Pluto LNG, a A$200-300m fabrication package for Gorgon LNG and two fabrication and construction packages for BHP Billiton’s Rapid Growth Project 5 (RGP 5) in Western Australia.
Contract announcements for Gorgon LNG will be made in 4QFY10. We believe Ausgroup will be able to win some of the tendered packages based on the ability to supply local content. Benefits will flow through FY11 onwards.
Our order-win assumptions for FY10 and FY11 are A$400m and A$500m respectively. About 60% of FY10 revenues are secured back order book.
With the disappointing result, the support may be at 0.48 cos nothing is comfirm till they annouce more contract. So there is still uncertainty.
Trade with caution.
Let's hope it can be supported at 61c.
The next support is at 49 cents .
bennykusman ( Date: 05-Nov-2009 19:27) Posted:
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dont worry... it's just a normal case as far as i know..
when a company give dividend, usually the share will drop afterwards coz some ppl only want to take the dividend and then sell the share.. somemore the Q1 result is not soo good, that's why ppl are throwing away.. i think next week it will regain the price again..no guarantee but im collecting at this price now as this price is seems to be quite difficult to get at this time...
Theresa ( Date: 05-Nov-2009 18:30) Posted:
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Does anyone know wat has happen to Ausgroup. There is no support at all. Today it has break down fr 0.60. Is there some bad news coming ?
What happened to the rich Mr Tan ? No more posts from him? When AG stock px tanks, he disappears. What happened to his TA skills 
last minute buy up again
another classic average down to zero stock
soulcries ( Date: 04-Nov-2009 11:36) Posted:
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seems 2nd session will be interesting
Actually ausgroup price now is consider cheap,the analyst have once again said is outperform,if can hold,hold till 2010 june.
by the way if u r trader,short term invester,u are terribly affected by the tankuku comments...
which i have earlier said that either is his broker brought alot or he is lying and buying a lot.
during our early school days, they teaches us many nice phrases, such as: "honesty is the best policy", fables, like the little red riding hood : never thrust any strangers ...& many more :-}
bennykusman ( Date: 04-Nov-2009 08:15) Posted:
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Ausgroup (S$0.62) - 1Q10 results- Improvements expected after gloomy quarter
Results below expectations; but maintain Outperform. 1Q10 net profit of A$1.7m (-
70% yoy) was 50% below our expectation and 60% below consensus due to weakerthan-
expected order-book recognition. We lower our earnings estimates by 10-37% for
FY10-12 to incorporate lower order-win assumptions. Accordingly, our target price drops
from S$1.08 to S$0.96, still based on 13x CY11 P/E, its average since listing.
Nevertheless, we retain our Outperform rating as we expect margin expansion and an
acceleration in order wins from LNG and mineral projects in Australia by mid-2010.
Revenue below expectations. 1Q10 revenue of A$74m (-43% yoy) was below our
expected A$82m due to a slower-ramp up of projects and order-book recognition mainly
from the mineral resource sector.
Improved gross margins. 1Q10 gross margins of 14% improved 9% pts yoy thanks to
productivity gains. We see the potential for further margin expansion if more high-margin
contracts from the oil & gas sector are executed.
Order book of A$350m; A$60m secured YTD. The order wins were below our expected
A$150m. Ausgroup had bid for A$600m worth of projects in 1Q10 and plans to submit
another A$700m-1.1bn by end-FY10 for projects in the oil & gas and mineral resource
sectors. We have lowered our order-win assumptions for FY10 to A$400m (from A$540m)
and A$500m for FY11 (from A$540m). We expect a pick-up from 2H10 from a recovery in
Australia’s mineral resource sector as projects are revived.
Positive sector outlook. We continue to see Ausgroup as a key beneficiary of a surge in
capex in the Australian LNG sector. Ausgroup recently secured a A$30m contract from
the Pluto LNG project and is bidding for A$1bn of fabrication work for the Gorgon project.
We see positive newsflow in the LNG sector providing stock catalysts.
ausgrp technically oversold.. poised for upturn..
dyodd
generating a good volume at early trading.. probably close slightly higher than yesterday.. the Q1 earnings based on my perception is normal since all of the company revenue also muchly drop.. but if you check the report, the expense also drop which means good cost cutting.. overall, the order book for this company about 310 million for next year, which means this company still cheap to buy at this current price.
Now we know why name is tankuku
Have a nice day ahead~
i think u just simply post here.. maybe u bought at 70 cents and above and asking others to followsuit... bad bad
tankuku ( Date: 03-Nov-2009 14:18) Posted:
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You can sue your broker and claim back your loss. As he did not give you his professional advice.
tankuku ( Date: 03-Nov-2009 14:18) Posted:
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OMG! Net profit dropped 70.4% to AUD1.7 million.
Gone case liao!
AusGroup’s 1Q FY2010 earnings
at AUD$1.7 million
�� Revenue of AUD$73.9 million
�� Modern Access Services contributed positively
�� Order book of AUD$347 million in hand
AusGroup Limited (‘AGL’ or ‘AusGroup’ or the 'Group'), a specialist service provider to the
natural resources sector, today announced its set of results for the three months ended 30
September 2009 (‘1Q FY2010’).
Financial Highlights: 1Q FY2010 1Q FY2009 Chg
(AUD$'000) (AUD$'000) %
Revenue 73,888 130,405 (43.3)
Gross Profit 10,091 16,733 (39.7)
Gross Profit Margin 13.7% 12.8% -
Other Operating Income 1,750 527 232.1
Other Operating Expenses (2,743) (3,352) (18.2)
Administrative Expenses (5,005) (4,294) 16.6
Net Profit Attributable to Equity Holders 1,720 5,802 (70.4)
Net Profit Margin 2.3% 4.4% -
Revenue for 1Q FY2010 decreased by 43% to AUD$73.9 million due to:
• The impact of reduced activity levels in the Group’s Australian operations caused by the
Global Financial Crisis; and
• Client driven schedule changes resulting in delays to several Australian contracts
Gone case liao!
AusGroup’s 1Q FY2010 earnings
at AUD$1.7 million
�� Revenue of AUD$73.9 million
�� Modern Access Services contributed positively
�� Order book of AUD$347 million in hand
AusGroup Limited (‘AGL’ or ‘AusGroup’ or the 'Group'), a specialist service provider to the
natural resources sector, today announced its set of results for the three months ended 30
September 2009 (‘1Q FY2010’).
Financial Highlights: 1Q FY2010 1Q FY2009 Chg
(AUD$'000) (AUD$'000) %
Revenue 73,888 130,405 (43.3)
Gross Profit 10,091 16,733 (39.7)
Gross Profit Margin 13.7% 12.8% -
Other Operating Income 1,750 527 232.1
Other Operating Expenses (2,743) (3,352) (18.2)
Administrative Expenses (5,005) (4,294) 16.6
Net Profit Attributable to Equity Holders 1,720 5,802 (70.4)
Net Profit Margin 2.3% 4.4% -
Revenue for 1Q FY2010 decreased by 43% to AUD$73.9 million due to:
• The impact of reduced activity levels in the Group’s Australian operations caused by the
Global Financial Crisis; and
• Client driven schedule changes resulting in delays to several Australian contracts
Yr broker invested must be alot
so he can dump once u enter