Vizione Holdings Bhd ("Vizione") earnings growth momentum remains solid, fuelled by its robust outstanding orderbook of RM3.3b. Recommend BUY with target price of RM 1.13 based on 12x PER FY19 as per YTD average of FBM Small Cap Index Fwd PE. 

Vizione through its wholly owned subsidiary, Wira Syukur Sdn Bhd ("WSSB") has 20 years of experience involving in government and private projects with successful fast track delivery. It remains as one of the leaders in the niche market of constructing low cost and affordable homes. To date, the group has managed to hit outstanding orderbook of RM3.3b, providing earnings visibility over the next four years. Assuming a net margin at 7%, the strong orderbook could turn into an average net profit of circa RM58m p.a in the coming four years. 

One of the notable contacts awarded is the Penang Mega Infrastructure package 2, a by-pass connecting Bandar Baru Ayer Itam to Lebuhraya Tun Dr Lim Chong Eu worth RM407.5m. The contract was awarded by Consortium Zenith to a 50:50 JV between Vizione and Vertice Bhd and is expected to commence in 1Q2019. The project is deemed as a stepping stone for Vizione to secure the remaining packages of the mega project with total value estimated at RM6.3b. 

Balance sheet remains healthy with net cash position with a RM28.5m cash hoard. Vizione's strength in affordable housing is in-line with the government's current initiative to build more affordable houses under the National Housing Policy. Meanwhile, the group is also looking for regional expansion to Vietnam and Indonesia for housing and infrastructure projects. Underpin by its strong orderbook, we expect Vizione's earnings to double in FY2019 given its high earnings visibility. 

Source: Rakuten Research - 29 Oct 2018