Gabungan AQRS (RM1.76, ADD TP RM1.87) announced that its whollyowned  subsidiary,  Gabungan  Strategik  had  on  16  Sep  2014  been awarded a sub-contract by Truvest for the construction and completion of staff  base-camp  and  common  facilities  including  infrastructure  for Petronas  Chemical  Fertiliser  Sabah  at  a  contract  sum  of  RM51.5m. Truvest  is  a  SPV  formed  by  REMT  Utama  (REMT)  and  Seri  Wilayah Engineering (SWE).

Pending an announcement, Truvest will be 90%, 5% and  5%  owned  by  Gabungan  AQRS,  RMET  and  SWE  respectively. Separately, Gabungan AQRS also announced that another wholly-owned subsidiary,  AQRS  The  Building  Company  had  entered  into  a  Sale  and Purchase  Agreement  (SPA)  with  Goodnite  to  purchase  a  parcel  of leasehold industrial land located in Daerah Ulu Langat measuring 15.037 acres for a cash consideration of RMRM21.3m. (Source: Bursa Malaysia)

Comment:  The  sub-contract  secured  from  Truvest  is  positive  for Gabungan  AQRS  but  is  within  the  RM300m  billings  from  new  contract wins which we expect in FY15. The proposed industrial land acquisition price of RM32.53 psf looks fair. Completion of the acquisition is expected within 24 months from the date of the SPA. Future contribution from this development  will  depend  also  on  the  finalisation  of  development  plans and  commencement  of  sales.  As  such,  we  are  keeping  our  forecasts, target price and ADD rating for Gabungan AQRS unchanged.

Source: Affin Hwang Capital Research - 4 Nov 2014