Journey to Wealth
Hock Seng Lee - Orderbook Swelled By RM291m Contract
THE BUZZ
Hock Seng Lee (HSL) announced that it signed an agreement with KP Mukah Development SB for the design, construction, completion, testing and commissioning of Universiti Teknologi Mara's campus facilities in Mukah, Sarawak. The contract sum for the project is RM291m.
OUR TAKE
Details on the project. We understand that the scope of works includes sand filling, piling, civil infrastructure, building, mechanical and electrical works. Implementation is expected to be spread over 36 months and will be completed by 3Q15.
Surpassed our FY12 replenishment target. With this contract, HSL will have secured a total of RM473m in new projects YTD, exceeding FY11's RM313m, and our previous FY12 order book replenishment target of RM400m. We deem the winning of this job as a positive surprise and hence, are upgrading our FY12 target replenishment to RM600m while our FY13 forecast of RM600m is left unchanged. HSL's current outstanding order book stands at approximately RM1.3bn.
BUY. We are maintaining our BUY call on HSL, with our FV upgraded to RM2.06, based on an unchanged FY12 PER of 12x following our earnings revision, in which our FY12 and FY13 net profit estimates are revised upward by 3.8% and 2.1% respectively. We continue to like HSL for its niche in marine engineering, established execution track record as well as its sturdy books, and target net cash per share of RM0.35 by end-FY12.
Source: OSK
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