News Eversendai has been appointed as a supplier
for the Iron Ore Distribution (Package P-302-Pipe and Cable Rack Structure and
Miscellaneous) project at Teluk Rubiah, Manjung, Perak.
The value of the contract is worth RM45.9m for a period of
12 months.
Comments This new contract is within our expectation
as it is part of the company’s c.RM1.4b order book replenishment forecast by
us.
As at YTD, ECB’s current order book secured has reached
RM928m and the newly secured contract of RM45.9m is within our order book
replenishment assumption.
Outlook In line
with our in-house construction sector Overweight view, we see the potential of
ECB to further secure steel structural projects from ETP (Economic
Transformation Programme) and the 10th Malaysia Plan
projects such as the much-awaited 100-storey Warisan Tower,
International Financial District and MRT.
In addition, ECB’s consortium with its partners, Mudajaya
and Alstrom, has managed to secure several power plant jobs like the Tanjung
Bin power plant and the Janamanjung plant, which may also help ECB to secure
more steel structural projects going forward like the Prai power plant this
year.
We also expect a stronger order book replenishment growth
from India as well as the Middle East as ECB has also bid for other jobs here
such as the Abu Dhabi airport expansion and Capital Gate, which is part of the
Abu Dhabi National Exhibition Centre.
Forecast We are
keeping our FY12-13E earnings forecasts of RM125-RM147m unchanged as we have
factored in c.RM1.4b order book replenishment and this contract is within our
forecast.
Rating Maintain
OUTPERFORM
Valuation Our fair value for the company remains
unchanged at RM2.33 based on 12x PER on its FY13E EPS.
Risks Fluctuation
in steel prices.
Adverse movement in foreign exchange rates.
Source: Kenanga
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