We maintain our BUY call, forecasts and FV of MYR0.96. Ahmad Zakihas bagged a MYR185m Putrajaya building/road job. We project its netprofit to surge 5x between FY13 and FY15, backed largely by improved construction profits and reduced plantation losses. Apart from being a good small-cap proxy to public infrastructure spending, we also like the company for its concession assets and oil palm plantations. 

Second key job win in FY14.Ahmad Zaki has secured from Putrajaya Resources SB a MYR185.1m contract for the construction of two office/retail blocks as well as the upgrading of Jalan Alamanda in Precinct 1, Putrajaya. This is the second key contract it has won in FY14, boosting its YTD job wins to MYR483m and its outstanding construction orderbook by 9% to MYR2.2bn (see Figure 1). Assuming an EBIT margin of 5%, the contract would fetch MYR9.3m in EBIT over a 28-month contract period. We are positive on this development. 

Forecasts. We maintain our forecasts, as we have assumed contract wins of MYR500m for Ahmad Zaki in FY14. 

Risks.These include: i) construction contract wins in FY14-15 falling short of our assumption of MYR500m per annum, and ii) an escalation in input costs.

Maintain BUY. Ahmad Zaki is a good small-cap proxy to public infrastructure spending given its involvement in the construction of the Klang Valley MRT project and various government facilities. Its current outstanding construction orderbook of MYR2.2bn (that can already last for 2-3 years) could surge by more than 70% to MYR3.8bn when the MYR1.55bn East Klang Valley Expressway (EKVE) hits the ground over the immediate term. We also like the company for its stable of concession assets comprising a highly profitable bunkering operation at the Kemaman Supply Base in Terengganu, the International Islamic University of Malaysia (IIUM) Teaching-Hospital which is under construction (26% completed) and the EKVE which is currently under planning. In addition, there is tremendous value in its 21,000-ha oil palm plantations (23% planted) in West Kalimantan, Indonesia. Our SOP based FV is unchanged at MYR0.96 (see Figure 2).

Source: RHB