- We maintain BUY on Econpile Holdings Bhd with an unchanged fair value of RM1.40/share – pegged to 15x FY15F PE.

- Econpile Holdings Bhd has continued on its winning streak since its listing last June with another job win worth RM26.7mil from Vistayu Sdn Bhd.

- The group announced on Bursa Malaysia yesterday that its wholly-owned subsidiary, Econpile (M) Sdn Bhd had received the letter of award to undertake piling and substructure works of a proposed mixed development in Section 13, Petaling Jaya.

- The duration of the contract is 62 weeks and the job is expected to be completed by July 2016.

- This is Econpile’s ninth major job win since its listing – bringing the total value of jobs won so far to RM440.4mil (at 1.1x FY14’s revenue).

- With this, we estimate Econpile’s outstanding order book to amount to ~RM500mil currently (RM517mil as at end-March), which will keep the group busy for the next 20 months.

- While the latest win has exceeded our new order book assumption of RM420mil for FY15F, we maintain our numbers as contributions from the latest win will only flow through strongly from FY16F onwards.

- The latest win affirms our investment thesis of topline growth and margin expansion for the group. Recall that its net margin had consistently expanded to 11% in 3QFY15, from 6.5% in 4QFY14 on the back of higher recognition of property-related jobs (which yield better margins).

- We expect margins to improve further as its KVMRT1 jobs (which yield lower margin) were completed in Feb. For the 9M period, the gross profit margin for propertyrelated jobs was 19% vs. 5% for infrastructure jobs.

- At its recent analyst briefing, management assured of prospects remaining bright with a tender book of ~RM1bil. It is also in good position to secure piling jobs for the upcoming KVMRT2 project.

- It has also invested RM28.9mil in capex for new machineries this year in anticipation of new job wins.

- We continue to like Econpile for its strong execution and good track record amid rising jobs flow. It is now trading at 12x FY15F PE. Maintain BUY.

Source: AmeSecurities Research - 22 May 2015