WASCO (5142, HLIB-BUY-TP RM1.27): Main market; Energy Infrastructure, Equipment & Services

Wasco recorded 3Q23 core PATAMI of RM20.8m (+52.7% QoQ, +7.7% YoY), lifting 9M23 core earnings to RM49.9m (+33.4%). The results account for 68%/71% of our/consensus full year expectations. We deem the results to be inline with our estimates as we expect sequential stronger earnings in the 4Q23.

Wasco’s current outstanding orderbook stood at an elevated RM3.6bn as at Sep-23, providing strong earnings outlook in the coming quarters as Wasco enters into steep recognition cycle for these projects on hand.

With a tenderbook amounting to RM7bn (historical success rate of c.30%), management guided that most of them will likely be awarded in FY24

Oversold and building up a strong base near 0.90-0.915 region. A successful breakout above 0.985 will spur greater upside towards

✅Current price: RM0.945

✅Entry price: RM0.90-0.915-0.945

✅Resistance: RM0.985-1.02-1.09

✅Cut loss: 0.895

✅FY12/2024E P/E (x): 8.9

✅Risk profile: Low

Source: Hong Leong Investment Bank Research - 29 Nov 2023