GUNKUL Is Out of Danger!

It is considerably a very cheap price of Gunkul Engineering Public Company Limited or GUNKUL when the share price has declined lower than THB 3. When looking at its fundamental factors and the target price at THB 3.50-3.80, there is still a big gap for an upside, but why has GUNKUL still couldn’t escape the curse of number 3?

The trap of GUNKUL’s price is none other than a concern about an approximately 20% of dilution effect from issuing 5:1 stock dividend payment. However, if trace back on 25 April 2019, it was clear that GUNKUL had already reflected all of the ditution issue. Now, come back to look at the fundamental factors that presents very interesting story of GUNKUL.

 

To begin with this year, GUNKUL will fully recognize its yearly profit from power plant businesses. This could make an opportunity from a profit base, which was lower than THB 1,000 million to dramatically increase over than THB 2000 million. In term of Engineering, Procurement and Construction or EPC is going very well. There are projects on process and bidding worth more than THB 30,000 million.

That means the opportunity of business growth in EPC will be represented clearly in the duration of 3-5 years.

In the part of financial, GUNKUL issues a stock dividend payment to GUNKUL’s investors which allows more liquidity in cash flow as well as new types of investment to help increase profit. Moreover, it helps substituting the concern of dilution that has happened (too much) previously.

GUNKUL managements hope that the rest of this year the business will grow stably and continuously from the revenue acquisition of renewable energy power plant both domestic and oversea.

Moreover, the backlogs worth more than THB 6,100 million are on hands which make revenue and net profit of GUNKUL to have an outstanding growth, targeting no less than 30% of growth.

If what the management team has stated was in fact true, it is already enough to substitute the dilution without a doubt.

To be noted for all above mentioned, the share price at THB 3 is too cheap or not!?

However, let’s say if GUNKUL could cross over a resistance line of THB 3, it will be a golden opportunity …. for a long long playable stock.