CGS-CIMB has named YTL Corp Bhd , Malayan Cement Bhd and HSS Engineers Bhd as the top beneficiaries from the HSR’s revival, according to a note on Wednesday (Sept 13).
We reiterate Add on HSS with a DCF-derived TP of RM1.21 (WACC: 9.4%, TG: 4.5%). At our TP, HSS will trade at 16.6x FY24F P/E, which is still below mean post-Covid-19. Downside risks are slower rollout of projects and single project risk from MRT 3 PMC.
We maintain our view that, while officially its tenderbook is at RM415m (historically 50% success rate.
There is a potential RM1.9bn worth of engineering and project management services (EPMS) projects in the pipeline locally over the next two years .
RHB Investment Research Reports Real Estate - Johor: The Malaysia-Singapore Interchange
rhbinvest Publish date: Tue, 31 Oct 2023, 09:47 AM Maintain OVERWEIGHT. We are upbeat on the outcome of the recent meeting between Malaysia and Singapore. Both governments have committed to accelerate the progress of the Johor-Singapore Special Economic Zone (SEZ), with further updates/details regarding tax incentives and cross-border electricity trading expected to be announced in the coming months. The leaders strongly emphasised the aim to smoother trips for people and transportation of goods. Companies that can potentially benefit significantly include UEM Sunrise, Sunway and AME Elite Consortium.
HSS Engineers Bhd remains positive on its outlook for financial year 2024
Although the group did not provide any guidance on project wins for FY24 during its recent Malaysia Corporate Day, HSS expects 2024 to be a better year, according to CGS-CIMB Research.
It noted that in the first nine months of 2023, the group’s core net profit increased by 43% year-on-year, with project replenishment totalling RM300mil.
HSS has a tender book of RM442mil with historically a 50% success rate.
The research firm said the biggest setback for HSS was the further extension of the validity period for the Mass Rapid Transit 3 (MRT 3) civil packages.
“This is the fourth extension, with the period now ending in March 2024.
“Nevertheless, recent news from the Transport Minister that land acquisition will commence this year over a two-year timeline gave some assurance that awards could be imminent.
“HSS’ outstanding order book as at September 2023 was RM1.49bil, of which we estimate 60% to be its project management consultancy (PMC) contract for MRT 3,” said CGS-CIMB Research.
For its current PMC role in the MRT3 project, the research house added that it is still undergoing optioneering and land acquisition work and a strong pick-up in revenue recognition would be visible once the three large civil packages for MRT 3 are awarded.
“Once that happens, more engineers can be deployed and progress billings will pick up exponentially.”
However, the research house said the slack from MRT 3 delays could possibly be picked up by other projects, such as its lead design consultant role for Westports phase two, which is estimated to have a contract value of RM100mil to RM150mil.
It said the more immediate wins for the group could be from flood mitigation projects, the Penang Light Rapid Transit and Pan Borneo Sabah phase 1B.
A total of 33 high priority flood mitigation projects will be rolled out, costing about RM11.8bil under Budget 2024.
“Out of this, HSS has submitted engineering design bids for the smaller projects (worth RM500mil)
“For Pan Borneo Sabah phase 1B, the awards should happen soon. HSS was awarded a RM145mil PMC role for Pan Borneo Sabah phase 1A (15 packages) in April 2021.
“As phase 1B will comprise 19 packages worth RM15.7bil, we estimate the PMC role to be worth RM300mil,” added CGS-CIMB Research.
The company is currently working on overseas ventures in Japan to facilitate a private and public partnership project with the Japan Overseas Infrastructure Investment Corp for transport and urban development.
what happened? was on strong uptrend but then suddenly reversed and crashed downward. some fund selling? project delayed? questions unanswered as there is no news or bursa announcement. but at the same time, substantial shareholders just sold 10 mln shares to institutional funds... hmm.
HSS is finally back at 1.07.. what a ride over the last 1 mth. am hoping it will deliver good results this month. Strong results means up up and away …
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
fruitcake
917 posts
Posted by fruitcake > 2022-10-06 18:20 | Report Abuse
not enough oomph