WTON: Below Expectation due to Seasonal Factor
02 Aug 2019
WTON: Below Expectation due to Seasonal Factor
WTON’s 1H19 revenue and net profit only covered by 34% and 31% to our 2019 forecast due to the seasonal factor i.e.: lower infrastructure spending and 2019 Election effect. However, the company managed to improve its gross margin by 104 bps in 2Q19 to the level of 13.4% (vs 12.4% n 1Q19) which was mainly fuelled by a significant increases in its service’s gross margin of 558 bps to 9.4% (vs 3.8% in 1Q19) thanks to its transformation as a one-stop solution of precast concrete business strategy. Recently, the share price increased by 54% YTD 2019 and still trading below its 3-years average fwd PER band of 15.47x, translated into an attractive valuation. Keep BUY rating on the counter.
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