KUALA LUMPUR: Maybank Investment Bank Research has reinitiated coverage on Hock Seng Lee Bhd on expectations of an earnings rebound in FY21 and strong job prospects in FY22 following the Sarawak state election.
The research house forecasts the group's net profit to rebound 6% in FY21 and expect this to rise a further 40%/11% to RM49mil/RM54mil in FY22/23.
Its earnings forecasts imply a three-year CAGR of 18%. It assumes a conservative order book replenishment of MYR300mil/400mil for FY21/22E.
Moving forward, Maybank IB expects major infrastructure to be revived and accelerated to meet deadlines following the disruptions caused by the MCOs.
It noted that the state government has allocated about RM6.3bil in 2021 to finance infrastructure projects in the state.
"We expect HSL to win more jobs given its expertise in the water infrastructure space.
"Major infrastructure projects in Sarawak include Coastal Road, Second Trunk Road, Lawas/Limbang Road, various road and bridge projects and the State’s water and electricity grid projects," it said.
Hock Seng Lee had a healthy outstanding order book worth RM1.8bil, which is 3.7x cover of its FY20 revenue and a strong net cash of RM199mil or 36 sen per share as at end-March 2021.
It also owns land for property development with a book value MYR185.7mil as at end-March 2021, translating to 34 sen per share.
Maybank IB has a "hold" call and target price of 97 sen on Hock Seng Lee.
Top 24 shareholders own 97.15% of Hock Seng Lee Berhad
Hock Seng Lee Enterprise Sdn Bhd 58.46% Permodalan Nasional Berhad 14.7% Employees Provident Fund of Malaysia 4.53% Chee Yu 4.52% Chee Hung Yu 4.04% Chee Ming Yii 1.58% Yuong Yu 1.39% Pertubuhan Keselamatan Sosial 1.33% Chee Sing Yii 1.17% Great Eastern Life Assurance (Malaysia) Berhad, Insurance Investments 1.03% Kung Kang Lau 0.65% Kiing Lau 0.61% Yuong Hui Yu 0.51% Public Mutual Berhad 0.47% Yuong How Yu 0.33% Kiew Hiong Hii 0.31% Sing Hie Tang 0.29% Song Ching Wee 0.25% See Chang 0.24% Ling Lee Chan 0.21% DBS Group Holdings Limited, Asset Management Arm 0.2% Ang Lui Lim 0.19% Kiing Lau 0.13% MIDF Amanah Asset Management Berhad 0.0027%
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Bgt 9963
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Posted by Bgt 9963 > 2021-07-07 08:47 |
Post removed.Why?