KUALA LUMPUR (Jan 11): Maybank Investment Bank Bhd Research has maintained its Overweight rating on the CONSTRUCTION [] sector and said that after an extremely dry year in terms of major work awards, 2012 has to be the year, with the Greater KL mass rapid transit (MRT) to dominate news flow.
Government land development roll-outs will also be positive for the construction sector, it said in a note Wednesday.
“We remain Overweight on the sector with our core pick being Gamuda.
“We think that the jobs will flow again in Sarawak to support the state’s industrialisation plan. Hock Seng Lee is our pick,” it said.
Maybank Research said Gamuda stays its top pick, adding that it was confident of sizeable job wins to boost Gamuda’s RM2 billion outstanding order book.
“The MRT tunnel win plus the Gemas-JB double-track rail project could raise its job size by RM4 billion each, we estimate. The stock is now trading at 13% below our RNAV-based target price,” it said.
The research house said HSL was our pick for an upturn in construction activities in Sarawak to bring large-scale energy intensive industries into the state.
“We also like Eversendai, an integrated structural steel turnkey contractor with a list of globally acclaimed landmark projects on record. Valuations are attractive at single digit forward PERs,” it said.
Government land development roll-outs will also be positive for the construction sector, it said in a note Wednesday.
“We remain Overweight on the sector with our core pick being Gamuda.
“We think that the jobs will flow again in Sarawak to support the state’s industrialisation plan. Hock Seng Lee is our pick,” it said.
Maybank Research said Gamuda stays its top pick, adding that it was confident of sizeable job wins to boost Gamuda’s RM2 billion outstanding order book.
“The MRT tunnel win plus the Gemas-JB double-track rail project could raise its job size by RM4 billion each, we estimate. The stock is now trading at 13% below our RNAV-based target price,” it said.
The research house said HSL was our pick for an upturn in construction activities in Sarawak to bring large-scale energy intensive industries into the state.
“We also like Eversendai, an integrated structural steel turnkey contractor with a list of globally acclaimed landmark projects on record. Valuations are attractive at single digit forward PERs,” it said.
