Rohas 75% owned subsidiary HGPT has secured RM38m contract from Power Grid Company of Bangladesh Ltd for the design, supply, installation, testing & commissioning of re-conducting of existing three 132KV Double Circuit Transmission Lines. The contractual completion period is 15 months. With YTD job wins at RM290m, EPCC orderbook is now estimated at RM680m, implying a cover ratio of 5.2x. Rohas is not susceptible to the slowdown in civil contract flows as it focuses on utilities (power, telco, water) with a presence in emerging ASEAN as well (Laos and Bangladesh). Forecast unchanged as YTD job wins are still within our target. Maintain BUY, TP: RM1.74 (16x FY18 P/E).

NEWSBREAK

Bags new contract. Rohas announced that its 75% owned subsidiary HG Power Transmission Sdn Bhd (HGPT) has been awarded a RM37.8m contract from the Power Grid Company of Bangladesh Ltd for the design, supply, installation, testing & commissioning of re-conducting of existing three 132KV Double Circuit Transmission Lines. The contractual completion period is 15 months.

HLIB’s VIEW

Second EPCC job win. This is the second job win for the company which brings the YTD sum to c.RM290m. With this job in the bag, Rohas’ EPCC orderbook stands at c.RM680m which translates to a healthy cover of 5.2x on FY17 EPCC revenue. This is expected to provide a strong boost to Rohas' earnings growth for the next two years. The company targeting for orderbook replenishment of RM500m this year with bulk of the new jobs from Bangladesh as HGPT is one of the top three EPCC companies in the country's power transmission sector.

Forecast. Unchanged as YTD job wins are still within our full year target of RM400m.

Maintain BUY, TP: RM1.74. Maintain BUY recommendation with unchanged TP of RM1.74. TP is based on unchanged 16x P/E multiple pegged to FY18 earnings. Rohas is not susceptible to the slowdown in civil contract flows as it focuses on utilities (power, telco, water) with a presence in emerging ASEAN as well (Laos and Bangladesh).

Source: Hong Leong Investment Bank Research - 10 Jul 2018