Journey to Wealth
Gabungan AQR - RM141m JKR roadworks award
News AQRS announced that it had secured an award from JKR worth RM141m for the upgrading of roads in Negeri Sembilan.
Comments Management guided that the company had already started work on the project, which is expected to be completed by end-2014.
The contract worth of RM141m was within our FY12E order book assumption of RM300m.
Outlook The outstanding order book currently stands at c. RM900m, which will provide earnings visibility for the group for the next two years.
We expect more contract flows to come in as the group is bidding for the sub-contracts the KVMRT project worth about RM300m to RM500m in the near term.
The earnings catalysts will be AQRS securing more contracts worth more than RM300m in FY12.
Forecast No changes to our FY12E and FY13E earnings forecasts.
Rating NOT RATED
We have a NOT RATED rating on the stock as we have yet initiate coverage. However, there is an attractive upside of 18% to our Target Price of RM1.39.
Valuation We value AQRS at RM1.39 based on an unchanged 7.0x PER on its FY13 EPS of 19.9 sen.
Risks Delays in construction projects.
Price escalation in raw materials and labour costs.
Source: Kenanga
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