THE BUZZ
Hock Seng Lee (HSL) announced that it has signed a subcontract agreement with PN Construction SB for the construction of Senibong Secondary School in Sarawak for a total sum of RM39.5m.
OUR TAKE
The project details. According to its Bursa announcement, HSL’s scope of works includes earthworks, piling works, building works, mechanical and electrical services. Implementation is expected to be spread over 24 months and will be completed by 3Q14.
Within expectations. With this contract in the bag, HSL has secured a total of RM512m in new projects YTD. We deem the latest deal as within our expectations, with our orderbook replenishment forecast unchanged at RM600m p.a. for FY12 to FY14. We estimate that HSL’s current outstanding orderbook totals approximately RM1.2bn.
BUY. No changes to our forecasts at this juncture. Maintain BUY on HSL, with our FV kept at RM2.22, based on an unchanged 12x FY13 PER. We continue to like HSL for its niche in marine engineering, established execution track record, strong presence in East Malaysia, as well as its sturdy books and target net cash per share of RM0.35 by end-FY12.
Source: OSK
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