- Maintain
BUY on Naim Holdings with an unchanged fair value of RM2.88/share. This is
pegged to a discount of 20% to its sum-of-parts value.
- Naim
reported a net profit of RM16mil for 1QFY12 against total turnover of RM94mil.
As expected, no dividend was declared for the quarter.
- While its
results constituted 29% of our full-year estimates (consensus: 21%), we deem it
to be in line as the quarter was boosted by a step-up in margin recognition
following the near completion of certain construction projects.
- After
some initial hiccups, progress on the Sabah Oil & Gas terminal project has
gathered pace, hitting 51% as at 31 March 2012.
- As a
result, construction EBIT margin improved to 7.1% against a loss in 4QFY11.
But, we expect margins to normalise in the coming quarter and we have projected
4.8% for the whole of FY12F.
- Naim is
stepping up its order book replenishment, and is bidding for over RM2bil worth
of new projects.
- Oil &
gas associate Dayang recorded higher contributions of RM5.5mil against RM4.3mil
a year earlier (+27% QoQ).
- Similarly,
the group recorded new property sales of RM66mil in 1QFY12 – almost one-third
the whole of FY11. New launches in the pipeline include an integrated development
at the old Bintulu Airport.
- Apart
from several infrastructure projects in Sarawak, we understand that Naim is
also gunning for some of the work packages under the Sg.Buloh-Kajang MRT
project – of which the group has been pre-qualified under the Bumi category.
- Naim is
also taking strategic steps to boost its recurring income base via a tie-up
with the KPJ group to develop a new hospital in Miri within its existing Bandar
Permyjaya township.
- Naim is
to own a 30% stake in the JV, and would also undertake the construction of the
hospital estimated to cost ~ RM70mil. Pending further details, we have yet to include
any contributions from this new venture.
Source: AmeSecurities
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