Top Story : Faber – Flying under the radar Outperform
New Coverage
- Faber Group is primarily focused in providing Integrated Facilities Management (IFM) to the healthcare and
non-healthcare industries, while maintaining a smallish presence in property development. Faber is a part
of UEM Group (32% shareholder), ultimately under Khazanah Nasional.
- For 9M09, approximately 84.1% of Faber's earnings are derived from IFM services. Faber is one of the
three companies that were awarded a concession agreement of 15 years (expiring in Oct 2011) to manage
non-medical hospital support services for 79 hospitals across Malaysia. We believe the concession
agreement will most likely be renewed given its political links, as well as its size and geographical reach.
- Property Development segment contributes approximately 14.4% for 9MFY09. Under its subsidiary Faber
Development Holdings, the company currently has few development projects across Klang Valley as well
as Kota Kinabalu. The company currently has unbilled sales of RM240m and approximately RM800m in
GDV which will last in 2013.
- Besides the concession, Faber also provides non-healthcare IFM services to both commercial and
residential properties in both public and private sectors. We believe Faber will continue to expand its nonconcession
given its ongoing expansion plans locally and overseas.
- We expect FY09 core EPS forecasts to drop by 14.0% due to lower property revenue offset by the
expansion in the IFM segment. However, as property development earnings recover in FY10-11 on new
launches, we have forecast corresponding EPS growth of 27.2% and 22.9% p.a. respectively.
- We have valued Faber based on sum-of-parts valuation and derived a fair value of RM2.49/share.
- Given its upside potential of 116.7% and net yield of 3.3%, we initiate coverage on Faber with an
Outperform call.

great!!!

faber can go to 1.80, the momentum is there

Yep, it has been on the move lately

Hoping it will break 2 bucks

Faber - the target price will be at three level before the stop hit, RM2.68.

"FABER GROUP PLANS TO MOVE INTO HEALTHCARE"

REVENUE FROM FABER's OVERSEAS FACILITIES MANAGEMENT INCREASE BY SIX FOLD DESPITE LOWER PROFIT FOR FYE DEC 2009

CLASSIFICATION: ACCOUNTING/AUDIT NOTIFICATION/ANALYSIS & BUSINESS PROJECTIONS
TYPE: Short Analysis / Reviews
22 March 2010

REVENUE FROM FABER's OVERSEAS FACILITIES MANAGEMENT INCREASE BY SIX FOLD DESPITE LOWER PROFIT FOR FYE DEC 2009 FABER GROUP's successful expansion of facilities management overseas resulted in a six-fold increase in Revenue from RM25.2m in 2008 to RM142.3m in 2009. This will likely expand further in 2010, since the bulk of the growth in 2009 came only in the last quarter. INSIDERASIA in a research article said that it expects overseas operations to contribute RM220m in revenue annually in 2010-2011.

The strong overseas contributions resulted in strong earnings for FABER in 2009. Despite lower property contributions, underlying Net Profit for 2009, excluding Exceptional Items, rose 32% to RM82.7m, Underlying PBT increased 26.6% to RM141.2m, while Revenue rose 21.8% to RM805.3m.

FYE DEC 2009 PROFIT LOWER BUT 4QE DEC 2009 STRONGER RESULTS
Overall, profit for 2009 was lower than 2008, as there was a One-Off Gain of RM93.2m from the sale of the Sheraton Hanoi Hotel in 2008.

4QE Dec 2009 was strong. Revenue doubled to RM303.9m, PBT surged 128% to RM65.8m while Net Profit surged 138% to RM42.6m. This was a significant improvement from 3QE Sep 2009 Net Profit of RM19m, RM26.4m for 2QE Jun 2009 and RM13.8m for 1QE Mar 2009.

Overseas facilities management was the main trigger for the improved results. Profits at the integrated facilities management arm surged 89% to RM127.9m from RM67.7m. PBT Margins here increased from 13.3% to 18.7%.

The Overseas Facilities Management Division was helped notably by contributions from new ventures overseas, particularly in the United Arab Emirates (UAE), which commenced in 1QE Mar 2009 and contributed mostly in 4QE Dec 2009. There were also higher variance orders, bed occupancy rate and new facilities at local hospitals under the FABER MEDI-SERVE concession arrangement.

PROPERTY DIVISION
The Property Division witnessed a smaller-than-expected decline, as earnings recognition from progress billings at 'Laman Rimbunan' picked up in subsequent quarters, after a small loss in 1QE Mar 2009. Property profits fell 34% to RM28.1m on Revenue of RM122.5m.

NET CASH AT END DEC 2009 HEALTHY
FABER's Balance Sheet remains very solid, with Net Cash of RM125.1m as at Dec 2009

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Added on March 23, 2010, 9:29 amthey are the biggest company on handling all the services in all the government hospitals which are more than 70 government hospitals and 400 healthcare institutions.

Cleansing services
clinical waste management

both are the most profitable licences.

U could see who are the most shareholders in this company. u will laugh as u go.

cheers
shareeye

This post has been edited by shareeye: Mar 23 2010, 09:29 AM

who wrote this

faber should be reaching 2.40 soon then 2.60 level next, thanks to Obama's health care, all healthcare stocks up, why faber? nevermind, keep keep going up...

Faber proposed to acquire Pantai le.

Was there an announcement that Faber proposed to acquire Pantai? I though it was just a rumor only?

today 5 sens down. safe to ciong?

KPJ better i tink..great business model,great balance sheet,low debt,extensive expansion plan..