Posted by waynewc > 2014-08-26 09:57 | Report Abuse

Fitters is one of the company that has newly ventures into the renewable energy industry, the original business of Fitters is the provision of safety equipment and fire prevention system. To gain more sustainable income, it then involved in the biomass to renewable energy-distributed generation and combined heat and power projects. This includes biomass gasification for rural electrification, captive power and grid-connected plants with capacities up to 4 Mwe and also conventional steam cycle power plants apply for larger capacity projects. Fitters also involved in waste to energy; sustainable crude palm oil mills; empty fruit bunch processing into revenue-producing products; integrated total solution for solid waste and effluent management at palm oil mills. Take a look on its Profit and Loss: Net profit 2009: 8 million Net profit 2010: 13 million Net profit 2011: 22 million Net profit 2012: 28 million Net profit 2013: 39 million The net profits grow by a steady rate over years, and showing the strong catch up of its core business, if the new ventures of renewable energy business were to pump in the profit in the future, it will surely cause the earning of Fitters to take a big leap! Look at Cypark and Amprop, their renewable energy units, i.e. solar energy generation, took their share price higher than the existing high! First quarter of 2014, Fitters recorded a higher QoQ result of 9 million, the coming 2Q result is around the corner, if the net profit can hit up to 15 million for 2Q, then the half year of net profit would achieving the 24 million, which put it to more assurance to hit the new high of its net earnings. On its balance sheet, the accumulation earning of Fitters is increasing and it’s approaching its amount of paid-up capital. This shows the ability of Fitters to issue bonus shares to its shareholders, and if the subsequent financial result is to be strong, it will further increase the possibility of bonus share issue. The ROE of fitters stay strong at 15.02% and its PE is as low as 10x, compared to the market average of 15x. Thus, the target price based on PE will be at RM2, take 10% of safety margin, the future price estimated can hit up to RM1.80, about 32% potential gain from current price. From the increasing of Land and machine holdings, it tells that the company is venturing into a different domain of business- the renewable energy business, and this indeed creates a lot of future potentials for Fitters. Technically, the current net profit is 3 times more comparing to the year 2010, which trade by an average price of RM0.60, now, if the 3 times net profit was to apply into the share price, the target price would be at RM1.80, align with that of the PE valuation! The chart pattern of Fitters is bullish, a gap up to the uncharted territory creates powerful momentum for further rally. The formation of ascending triangle and breakout of from its end will support the bull. Nearest support is located at RM1.28. For the chart pattern illustration and more info, kindly refer http://chartian.com/fitters-9318/