Background – Primarily engaged in civil engineering and building construction works. Diversified into property development as well as concessions in 2013. Notable completed projects include Universiti Tun Hussein Onn, Universiti Sains Sabah and River of Life project under PEMANDU.

Key Strengths – Over 25 years of experience in delivering various infrastructure and building projects in the construction sector. Well diversified business with stream of recurring income from concession project (DUKE Highway). Strategic landbank (collectively 71 ac.) situated in the heart of Kuala Lumpur, Kuantan, Pahang and Danga Bay, Johor Bahru.

Future Plans – To commence the construction of Phase 3 of DUKE Highway in September 2016 and expected to be completed in 1H2020. Outstanding orderbook of RM5.28 bln to sustain earnings until 2019. Construction tenderbook consist of mega-infrastructure road projects such as SUKE, DASH, LRT3, MRT2 and High Speed Rail, coupled with building works such as PPA1M and Bandar Malaysia. Future earnings to be sustained until 2023 with estimated GDV of RM7.78 bln worth of property projects in the pipeline in the Klang Valley.

Investment Risk – Future challenges include rising interest rates, more stringent loan policies and slowdown in the property market. Delays in project completion will result in cost overrun, subsequently damage the company’s reputation and affect the company’s ability in securing future contracts.

Investment Highlights – At RM1.97, PER of 10.8x in 2016 is below peers average of 13.0x, representing potential upside. Delivered 5-year double digit revenue and net profit CAGR of 39.6% and 21.1% to RM793.6 mln and RM156.4 mln respectively in 2016. Consistently rewarding shareholders with dividend payouts.

Source: M+ Online Research - 21 Sep 2016