Vizione Holdings Bhd (“Vizione”) posted another quarter of solid financial results amid the challenging market conditions within the construction sector. We believe the company’s growth trajectory remains intact hence recommending a BUY with a target price of RM1.20 based on 9.6x PER FY20 as per the closest related peers.

Vizione recorded a 23% growth in revenue and 120% jump in net profit in the third quarter FY2019 results compared to the corresponding quarter a year ago. We continue to favour this company due to its strong execution track record evidenced by the acquisition of Wira Syukur Sdn Bhd which has exceeded the profit guarantee and management’s prudent measures on undertaking certain higher margin private and infrastructure projects, which has led the group to enjoy decent margins.

To recap, Vizione has a 20 years of successful fast track delivery, the group has to date completed 50 private and government projects worth RM1.9bn. The group has also secured the RM407.5m Penang Mega Infrastructure Project (package 2) which is deemed to be a stepping stone to secure the remaining packages with total estimated value of RM6.3bn. Vizione has an outstanding orderbook of circa RM2.9bn, which will keep them busy until year 2020.

Additionally, the group is also embarking on the property segment via the acquisition of Pembinaan Angkasa Permai Sdn Bhd, which is a joint developer of an apartment project called 216 Residences with a gross development value of approx. RM111.3m. Having ventured into property segment, this will set a better footing for Vizione to complement its construction division.

Vizione’s balance sheet remains healthy with a gearing of 0.05x and thus should provide ample room for further expansion especially in the concession business. While the profit growth is on track, we expect better job flows going forward on the back of the improving construction sector.

Source: Rakuten Research - 6 May 2019