Wah Seong Corporation (WSC) reported core net profit of RM14.1m for 1QFY23, from a core net loss of RM11.9m in 1QFY22, on the back of higher revenue of RM639.7m, +110.6% YoY. Energy solutions services (ESS) (+147% YoY) remained the performance driver for this quarter, followed by industrial trading services (ITS) (+101.9%) and renewable energy (RE) (+87.6%). Although WSC reported lower core net profit of RM14.1m on a sequential basis (-47.4% QoQ), we deem this as a commendable start, exceeding our FY23 estimates at 31.3% of full-year numbers, though lagging consensus at 19.1%. We gather that most of the key projects are still at initial stages in 1QFY23 and will go into full swing in 2H2023. This includes the EACOP, Yinson Agogo and Qatar projects, which is part of its existing orderbook of RM3.5bn. On account of stronger work flows ahead, we raise our FY23-25 estimates by an average of 53.4%. We also upgrade our call to Outperform (from Neutral) with a higher TP to RM1.00 (from RM0.70) based on PE multiple of 11x with rollover FY24 EPS (+1 standard deviation of blended Forward PE).
Source: PublicInvest Research - 24 May 2023
Chart | Stock Name | Last | Change | Volume |
---|