Mile High Projection.

In today's Star Biz, there is a piece on Transmile down on worries over 2005 result .

Makes me wonder cos i do know that Transmile performance for its current fiscal year 2005 has been rather decent.

The following is Transmil net earnings this fiscal year.

Q1 net profit = 10.816 mil, Q2 net profit = 13.206 mil, Q3 net profit = 18.090 mil.

As can been seen its net earnings has been improving each quarter.

Beh pai mah. Tiok boh?

And its current nine-month net profit total of 42.112 million is much more than its last year nine-month profit for the same period of 27.296 million.

Now this one tiny-little-itsy-bitsy-problem.

Ze market sifus is EXPECTING and PROJECTING (some call it assuming - LOL - making ze ass-out-of-u-and-me mah) a net profit of over 105 million for the current fiscal year.

LOL!!!

Comeon.... isn't such projection way too rosy? Way too optimistic?

Look at simple maths.

3 quarters done and Transmile has managed only 42.112 mil.

Soooooo.... in order to meet ze market sifus projections of 105 mil... and with only ONE quarterly earnings left in Transmiles current fiscal year.... what ze market sifus are saying is that they expect and they ASS-U-ME dat Transmile will make 62.888 mil (105 minus 42.122 = 62.888) for that remaining Q4 earnings.

Aisehhhhhhhhhhhh lah..... like dis can meh?

From 10.816mil -> 13.206 mil -> 18.090 mil -> 62.888 mil??

Comeon...... be a bit more realistic lah.... !!!!!

Tiok boh???

And here is a snippet (in blue italic) of their write-up...

X We like Transmile for: (1) Its unique product, i.e. point-to-point express air transportation service; (2) Its ability to secure traffic rights for lucrative routes; and (3) Its EPS that is expected to grow at a CAGR of 67% between FY12/04 and FY12/07, backed by two full-fledged US-bound services. Maintain OUTPERFORM with a DCF-derived indicative fair value of RM12. In our DCF model, we apply a discount rate that is equivalent to Transmile’s WACC of 10.1% (based on a 20-year risk free rate of 6%, an equity premium risk of 7.5%, Transmile’s Beta of 1.07x, a target debt-equity ratio of 0.7x, and an average before-tax borrowing cost of 6% per annum).

Can see onot?

A CAGR of 67% between fy12/04 and fy12/07?

!!!!!!!!!!!!!!!!!!!

Gosh..... now that's a mile high projection lah!

Ohhh.... and when the stock does not meet such lofty projections assigned by these market sifus... those stock are considered to be performing below market expectations!

Gee.... so what is ur expectation?

Mine?

I think its still rather dark in my ninja-turtle-shell lah!

:D