Thursday 9 August 2012

Naim Holding - It owned a 34% stake in associate Dayang Enterprise Holdings Bhd


It owned a 34% stake in associate Dayang Enterprise Holdings Bhd, according to research analysts.

Its wholly-owned subsidiary Naim Engineering Sdn Bhd won a RM208.2milcontract for one of the work packages for the My Rapid Transit (MRT) project inKuala Lumpur.

Naim Holdings is involved in property development, andcontracting of construction, civil engineering, oil and gas and infrastructure projects.

The major shareholders of Naim Holdings include Island Harvests Sdn Bhd (12.25%), Tapak Beringin Sdn Bhd (10.96%), Lembaga TabungHaji (10%), managing director Datuk Hasmi Hasnan (6.67%),Skim Amanah Saham Bumiputra or ASB (5%), Employees Provident Fund (5%) and chairman Datuk Abdul Hamed Sepawi (4.86%).

Hasmi is also the chairman of Dayang Enterprise.

Naim Holdings'33.63% stake in Dayang Enterprise, which is a service provider to the oil andgas industry, is worth RM379.1mil or RM1.51 per Naim Holdings share (based on aprice of RM2.05 per Dayang Enterprise share).

Also, Naim Holdingshas an undeveloped land bank of 2,620 acres in Sarawakwith an estimated gross development value (GDV) of RM9.5bil. The group's flagship property developments are Bandar Baru Permyjaya inMiri, Desa Ilmu in Kota Samarahan, and the up-market Riveria satellite townshipin Kuching.

TA Securities is maintaining a buy call on NaimHoldings' stock, with a target price of RM2.26 per share.

To Aug 2012 Naim Holdings' outstanding order bookstood at RM1.3bil, including the MRT contract, which would provide earningsvisibility for the next four years. The next re-rating catalyst for NaimHoldings will be additional new contracts secured in 2012. Thus far, the grouphas secured RM500mil worth of new contracts in 2012.

There was plenty ofshare price upside potential for Naim Holdings within a two to three-yearhorizon, based on new property developments and possibly more governmentconstruction contracts in Sarawak.

Naim Holdings would develop the site of the oldBintulu airport into an integrated upmarket commercial and residential project,with a GDV of RM2bil. Also, look at the proximity of the fast-developing new Samalaju Industrial Park , where internationalcompanies have invested, to Bintulu. A new RM1.8bil Samalaju Port project isalso ongoing in Bintulu. So, there is strong potential for lucrative propertyplays for Naim Holdings. Samalaju is one of the five growth nodes of SarawakCorridor of Renewable Energy (SCORE) and it will become the state's newheavy-industry centre.

Noldings' MRT contract win underpinned itscompetitiveness, as it is the first East Malaysian contractor to be awarded oneof the main packages of the MRT project. Future prospects remain bright withthe development of SCORE, where Naimis poised to be one of the largest beneficiaries as the local champion.

Naim Holdings' unbilled sales stood at RM176mil.

Naim Holdings posted a significant 52.3% drop in netprofit to RM46.6mil, compared with RM97.75mil in 2010. Revenue dropped 32.8%year-on-year to RM411.9mil for the year ended Dec 31, 2011. Naim Holdings hadposted improved results for the first quarter ended March 31, where its netprofit grew 31.5% year-on-year to RM16.1mil. Revenue was 22% lower to RM94.2milfor the quarter under review, and the group attributed the earnings growth toimproved margins for its construction segment as well as better performance ofits associates and joint ventures, and a decrease in administrative expense.

Earnings recovery on the horizon for Naim Holdings,and its balance

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