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Hock Seng Lee - Not a Bad Start to 2013

kiasutrader
Publish date: Fri, 11 Jan 2013, 09:29 AM
THE TAKE 
 
Hock  Seng  Lee  (HSL)  announced  on  Bursa  yesterday  that  it  has  received  a  letter  of acceptance  from  Lembaga  Kemajuan  Bintulu  to  carry  out  the  infrastructure  works  at Samalaju Industrial Park in a contract worth RM48.9m. The job, to be completed by 3Q14, will involve earthworks, drainage works, pavement and related external works.    
 
THE BUZZ 
 
A  creditable  start  to  2013.  The contract marks HSL's first job win this year. We deem it within our expectations and make no changes to our FY13 orderbook replenishment target of  RM600m.  Although  the company's RM512m worth of new  jobs  secured  in  FY12  fell short of our previously projected RM600m, we expect more contracts to be dished out this year,  especially  within  the  Samalaju  development  area,  where  activities  are  gradually gathering momentum.  
 
BUY. No changes to our forecasts at this juncture. Maintain BUY on HSL, with our FV kept at  RM2.10,  based  on  an  unchanged  12x  FY13  PER.  We  continue  to  like  the company's niche  in  marine  engineering,  good  execution  track  record,  strong  presence  in  East Malaysia, as well as its sturdy books and target net cash per share of  more than RM0.40 by end-FY12.

Source: OSK
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