Investment Highlights

• We raise our FY18-19F forecast by 2% annually, increase our SOP-based FV by 2% to RM1.42 (vs RM1.39 previously) and maintain our BUY call.

• This follows a new road maintenance concession awarded by the Federal Government to the 70:30 DALHCM Sdn Bhd JV to undertake routine and periodic maintenance spanning across 751km. This new concession would commence from 1 September 2018 for the period of 10 years.

• The new concession could potentially add on its current road maintenance concession order book by >RM600mil which will last for the period of 10 years and expected to contribute positively for Protasco’s FY18 earnings and beyond.

• We continue to like Protasco for: 1) the recurring income stream from its road maintenance concessions with an outstanding value of RM4.0bil which will last until 2026 (and beyond if they are renewed); 2) its growing conventional construction business, particularly the affordable housing segment; 3) the tremendous value of its landbank in Bangi, KL; and 4) its attractive dividend yield of 5-7% per annum.

Source: AmInvest Research - 15 Feb 2018