Circulating an article from SJ Securities on Crest Builder. 

 

 

 

Corporate Profile

 

Crest Builder Holdings Berhad (CBHB) is a Malaysia-based company that has strong footholds in the construction and property development sectors. The group’s operation can generally be categorised under 4 different segments namely (i) Construction, (ii) Property Development, (iii) Concession, as well as (iv) Investment Holdings. The group is also a registered Class A Contractor with the Ministry of Entrepreneurial Development and a Category G7 with the Construction Industry Development Board (CIDB). 

 

Abundant orderbook to sustain till 2021

 

CBHB’s outstanding construction order book stands at around RM1.0 bil, which is expected to last until mid FY21. It has bagged RM100 mil worth of construction jobs in 1HFY19, and is targeting to replenish its order book by another RM500 mil worth of projects in 2HFY19. We are also expecting faster recognition in progressive billing as most of its existing projects have completed the initial stage and on track to the higher stage with higher job claims. Another silver lining will be the possible jobs winning from East Coast Rail Link (ECRL); the group had submitted application to pre-qualify for ECRL’s civil work packages earlier this year and we are guided by its management that it is targeting to bid for station, depot, and building works. 

 

Billion-dollar property projects in the pipeline

 

Among its ongoing property projects, we note that Alam Sanjung and The Greens @ Subang West are fully taken up. With almost all projects being fully taken up,  we expect property division’s earnings to dip in FY19. However, it has another two new developments namely Latitud8 (GDV: RM1.1 bil) and Elevat8 (GDV: RM1.33 bil) in the pipeline and on track to be launched in FY20. We expect the two billion-dollar projects to be the next earnings driver for property development from FY20 onwards.  

 

Recurring income

 

Moreover, it has property investments in 2 corporate towers namely The Crest and Tierra Crest that could collect rental incomes of about RM16 mil per annum. It also owns a 23-year BuildLease-Maintain-Transfer concession agreement with the Ministry of Higher Education and Universiti Teknologi Mara (UiTM) to build and maintain a campus in Tapah, Perak, enabling it to derive recurring income of around RM43.5 mil annually until Jan 2034.