- Puncak Niaga Holdings Bhd announced last Friday that it has accepted a tender acceptance letter for the Package D44 sewer pipe network construction job worth RM394mil.

- The job was awarded by the Jabatan Perkhidmatan Pembetungan, Kementerian Tenaga, Teknologi Hijau dan Air.

- The job scope encompasses the construction of new sewer pipe networks, pumping station, and rationalisation of existing sewer infrastructure in Bunus, Kuala Lumpur.

- The contract period is 48 months with a completion date of 24 February 2018. As such, we envision the project to contribute ~RM100mil per annum from FY14F to FY18F.

- There are no changes to our forecast as we have already incorporated expectations of such construction jobs into our model.

- We are still waiting for the Federal government to kick-start talks and make a fresh offer for the water assets in the state.

- Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili was reported as saying that the Fed government is willing to reach a “willing buyer, willing seller” deal to acquire the assets.

- This is despite the signals of a possibility of invoking Section 114 of the Water Services Industry Act (WASIA). We expect an offer to come within the 1H of this year.

- We maintain HOLD on Puncak Niaga with a fair value of RM3.40/share as we await a new offer. 

Source: AmeSecurities