Stock Name: PUNCAK
Company Name: PUNCAK NIAGA HOLDINGS BHD
Research House: ECMLIBRA



ECM Libra Investment Research has maintained the "sell" call on Puncak Niaga Holdings Bhd, amid cash flow problems due to a non-water tariff revision of 37 per cent, and a hazy outlook to a resolution of the protracted Selangor water restructuring exercise.

ECM Libra Investment said it made no changes to its estimates pending the outcome of the tender by Puncak Niaga for a water supply and treatment project in India.

Puncak Niaga yesterday entered into two separate joint venture agreements with P&C Constructions (P) Ltd in India to jointly bid for the water supply and flourosis mitigation project, called the Tamilnadu Water Supply and Drainage Board in India.

Puncak Niaga together with P&C would form a joint venture (JV) called PNHB-P&C Joint Venture (PPJV) to bid for Packages III and V of the Hogenakkal project for the Dharmapuri and Krishnagiri districts.

Puncak Niaga will lead the joint venture with a 60 per cent stake, with the remaining 40 per cent held by P&C.

The Hogenakkal Water Supply project is valued at RM1.4 billion, comprising five packages to be undertaken in two phases, with completion expected by December 2012.

The project also comes with a five-year operation and maintenance period.

"Based on our preliminary estimates, Package III and Package V, which are for the laying of pipelines for a total of 6,117km, could be worth approximately RM756 million.

"The five year operation and maintenance is estimated to be worth about RM124.9 million," ECM Libra Investment said.

It said the project is in line with Puncak Niaga's efforts to expand its presence in India.

Puncak Niaga had entered into joint venture agreement with P&C in August 2010 to jointly participate in an international competitive tender for a pipeline project in Mangalore, India. -- Bernama