THE TAKE
Hock Seng Lee (HSL) announced on Bursa yesterday that it has received a letter of acceptance from Lembaga Kemajuan Bintulu to carry out the infrastructure works at Samalaju Industrial Park in a contract worth RM48.9m. The job, to be completed by 3Q14, will involve earthworks, drainage works, pavement and related external works.
THE BUZZ
A creditable start to 2013. The contract marks HSL’s first job win this year. We deem it within our expectations and make no changes to our FY13 orderbook replenishment target of RM600m. Although the company’s RM512m worth of new jobs secured in FY12 fell short of our previously projected RM600m, we expect more contracts to be dished out this year, especially within the Samalaju development area, where activities are gradually gathering momentum.
BUY. No changes to our forecasts at this juncture. Maintain BUY on HSL, with our FV kept at RM2.10, based on an unchanged 12x FY13 PER. We continue to like the company’s niche in marine engineering, good execution track record, strong presence in East Malaysia, as well as its sturdy books and target net cash per share of more than RM0.40 by end-FY12.
Source: OSK
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