Taliworks Corporation Bhd (“Taliworks” or “the Group”) is a leading infrastructure company primarily engaged in: (i) water treatment, supply & distribution; (ii) highway toll concessionaire, operations & maintenance operator; (iii) waste management; (iv) engineering & construction; and (v) renewable energy. Coupled with its expansionary plans, we forecast Taliworks to register earnings of RM80.3m and RM90.9m in FY2022 and FY2023 respectively. BUY with a TP of RM1.12 based on SOP valuation.

Taliworks has an operations and maintenance contract for the Sungai Selangor Water Treatment Plant Phase 1 that supplies treated potable water to various parts of Selangor and Kuala Lumpur. The Group provide a combined design operating capacity of 950m litres per day with contract expiring in December 2036. Taliworks owns and operates two highways, namely Grand Saga Highway (51% stake concession expiring 09/2045) and Grand Sepadu Highway (37.5% stake concession expiring 12/2032). The company expects toll hikes every 5 years for both highways.

With its CIDB G7 license and notable track records, Taliworks has managed to secure infrastructure construction project with higher contract especially Sg Rasau water treatment plan Package 1 and Package 2. We expect a turnaround in its construction segment this year.

On 21 April 2022, Taliworks has successfully acquired a majority economic interest in 4 brownfield solar projects within the vicinity of KLIA with an aggregate capacity of 19-megawatt peak and 100% in TerraForm Global Operating (Malaysia) Sdn Bhd, an O&M services provider of the solar projects. All 4 projects will immediately generate recurring income to Taliworks.

We forecast Taliworks to declare a decent dividend yield of 7.1% and 3.6% in FY22 and FY23 respectively.

Source: Rakuten Research - 2 Jun 2022