Hock Seng Lee (Nov 1, RM1.43)
Maintain neutral with target price of RM1.50: Hock Seng Lee Bhd (HSL) secured a contract worth RM90.3 million from the Regional Corridor Development Authority (Recoda) of Score (the Sarawak Corridor of Renewable Energy) with a contract period of 17 months.
The contract was HSL’s first successful tender for a project to be directly awarded by Recoda.
The scope of work for the project includes substantial mechanical and electrical works, earthworks, drainage and retaining structures, piling, piping and actual construction of the treatment plant and associated works.
The associated works involve the construction and commissioning of a pump house, chemical house, aerators, flocculation tanks, sedimentation tanks and other filtration process facilities.
One of the beneficiaries of Budget 2012, HSL’s current outstanding order book stands at RM1.1 billion. To date, HSL has secured RM243.2 million worth of projects. Moving forward, we will maintain our RM400 million order book replenishment assumption for HSL as it could be one of the beneficiaries of Budget 2012.
Under Budget 2012, the prime minister announced a RM5 billion allocation to provide basic rural infrastructure including roads, power and water supply.
The prime minister made particular mention of the government’s concern over clean water supply to communities in the remote areas of Sabah and Sarawak.
Rural water supply is a field that HSL is keen to pursue, drawing on its marine engineering skills.
We are maintaining our earnings projection as total project value secured is still within our order book replenishment assumption.
We are maintaining our “neutral” recommendation with target price of RM1.50 for HSL by ascribing price-to-earnings ratio of 8.2 times against FY12 earnings per share of 18.4 sen. — MIDF Research
This article appeared in The Edge Financial Daily, November 2, 2011.
Maintain neutral with target price of RM1.50: Hock Seng Lee Bhd (HSL) secured a contract worth RM90.3 million from the Regional Corridor Development Authority (Recoda) of Score (the Sarawak Corridor of Renewable Energy) with a contract period of 17 months.
The contract was HSL’s first successful tender for a project to be directly awarded by Recoda.
The scope of work for the project includes substantial mechanical and electrical works, earthworks, drainage and retaining structures, piling, piping and actual construction of the treatment plant and associated works.
The associated works involve the construction and commissioning of a pump house, chemical house, aerators, flocculation tanks, sedimentation tanks and other filtration process facilities.
One of the beneficiaries of Budget 2012, HSL’s current outstanding order book stands at RM1.1 billion. To date, HSL has secured RM243.2 million worth of projects. Moving forward, we will maintain our RM400 million order book replenishment assumption for HSL as it could be one of the beneficiaries of Budget 2012.
Under Budget 2012, the prime minister announced a RM5 billion allocation to provide basic rural infrastructure including roads, power and water supply.
The prime minister made particular mention of the government’s concern over clean water supply to communities in the remote areas of Sabah and Sarawak.
Rural water supply is a field that HSL is keen to pursue, drawing on its marine engineering skills.
We are maintaining our earnings projection as total project value secured is still within our order book replenishment assumption.
We are maintaining our “neutral” recommendation with target price of RM1.50 for HSL by ascribing price-to-earnings ratio of 8.2 times against FY12 earnings per share of 18.4 sen. — MIDF Research
This article appeared in The Edge Financial Daily, November 2, 2011.
