Rotary Engineering, worth more than it's last traded price of 61.5 cents

There is no rational behind the low price (stuck at 60 cents) of Rotary Engineering as its future is bright and it has a strong financial standing. It is lead by a visionary chairman who was last year's Entrepreneur of the year. Look at the recent announcement. The price of the stock hardly moved since then. This stock is really under-valued. Fortunately its trading volume has picked up in the last week. time to accumulate
Benalec Holdings Berhad Enters into MOU with Rotary
Engineering Limited
Kuala Lumpur, Malaysia - Benalec Holdings Berhad (BHB:MK) and Singapore listed company
Rotary Engineering Limited jointly announced today the signing of a Memorandum of
Understanding (MOU) to develop an independent deepwater storage terminal for oil
products in Tanjung Piai. Strategically located at the south-western tip of Johor, Tanjung
Piai offers easy access to international shipping routes of Straits of Malacca and Singapore's
Jurong Island, an international petroleum, petrochemical and terminal hub.
With an initial capacity of 1 million cubic metres, with subsequent phases to increase
capacity to 3 million cbm on the total reclaimed land area of 250 acres, the proposed
terminal will be a petroleum storage facility for storing, blending and distributing crude oil
and its derivatives. The integrated storage facility will be completed with deepwater jetty
facilities capable of handling very large crude carriers (VLCCs).
The two companies will jointly embark on a technical feasibility study, after which they will
form a joint venture company by participating in taking equity ownership and development
of the first 1 million cubic metres oil storage terminal as well as other terminal projects. In
addition, the joint venture company will exclusively undertake the promotion of Tanjung Piai
as an oil and petrochemicals terminal hub.
Vincent Leaw, Managing Director of Benalec Holdings Berhad said: "We are delighted to
have Rotary Engineering on board with us in our maiden foray into the high growth oil and
gas and petrochemical industry. Tanjung Piai is very well positioned to complement the
region's growth in the oil and gas industry, and to tap on the growing demand for the
storage and distribution of petroleum and petrochemical products in Asia."
Roger Chia Kim Piow, Chairman & Managing Director of Rotary Engineering said: "We are
excited to provide more value added services to our clients through this strategic
partnership with Benalec. With Tanjung Piai’s close proximity to Jurong Island, we see much
synergy between Singapore and Johor in further developing this area into an even larger
international petroleum hub."

Net profit is down sharply in 9M2011.
PE is abt 7 X.

Doesn't look so attractive at the moment, except for div yield of 7.5% (assuming they keep up the same amount in Fy12. What do you think?

Hi Abb, there is a valid reason why revenue and profits are down at this time. Pls read the report below. 4Q11 and 2012 will surely be better as the work on the SATORP project picks up and Rotary receives more payment. Also, expects Rotary to start on more oil-related projects with Malaysia and Middle East as economy picks up and oil price increases. Rotary is essential a well-managed company, with little debt, good amount of free cashflow and exciting plans in the bag waiting to be executed once the global economy improves. Don't miss this boat. It has come down from more than a dollarsince April. It will reach that price in 2012 again, I believe, once more payment from the SATORP project is received and more oil-related projects are activated by cash-rich Arab nations.

{2011 Third Quarter (3Q11) Review}

Revenue decreased by 25% to $117 million in 3Q11 as compared to $156 million in 3Q10. These were mainly due to the summer climate and Ramadan in the construction phase of the SATORP project as well as the delay in commencement of certain projects. Gross profit margin remained stable. Administrative costs, excluding foreign exchange, were in line with lower revenue. Other operating expenses and finance costs remained stable. Fair value loss on foreign exchange contracts of $8.5 million for 3Q11 was due to the recognition of unrealised foreign exchange loss on hedges taken up on projected US dollar cashflows (based on the foreign exchange rates at end of October 2011, this unrealised fair value loss has reduced by $6.3 million to $2.2 million). The unrealised fair value loss was mitigated by gain of $4.3 million on US dollar assets. Share of results from associates improved this quarter as provisions for foreseeable losses were made in the previous corresponding quarter.

James, how are you ? U agree with CIMB's underperform rating?

 UNDERPERFORM - Maintained  |  Share Price S$0.75 - Tgt. S$0.63

 Oil & Gas - Equipment & Svs  |  - by Zhi Bin YEO

The outlook for downstream EPC service providers remains dour. Fierce  competition on Jurong Island has resulted in margin slippage. The  government’s aid to help infrastructure companies internationalise  cannot come quickly enough. At 21% of FY11 (full-year at 77%), 4Q was
53% below our forecast due to lower-than-expected revenue but broadly  in line with consensus. We cut our FY12-13 EPS forecasts and  introduce FY14 numbers. However, we raise our target price, now at  1.2x (1x before) CY12 P/BV, at 1 SD below mean. Underperform maintained.

Hi Yeh Rotary's financial statements are really not impressive. Its revenue and profit margin have been decreasing for the last 1 year. Dividends are not fantastic and share price has dropped so much since its peak. and ORDER BOOK is also dropping in value. EPS and equity is also dropping. All considered, yes, i agree with CIMB's rating. I recommend sell. There are really better stocks and companies to invest in now.

Sorry to see it has gone down to 42 cents now. Hope it comes back again