Secures Architectural, Structural & Civil Works Worth RM142.3mn

TRC has secured a sub-contract work valued at RM142.3mn from Performing Arts Centre Consortium Sdn Bhd. The project involves the architectural, structural, and civil works for the proposed transformation of the state legislative building.

Our View

With TRC’s second job secured in 2024, total YTD contract wins have reached RM500.3mn, meeting 71.5% of our FY24 job replenishment assumption of RM700mn. Following the job win, we estimate the group’s total outstanding orderbook to be approximately RM892.3mn, equivalent to 1.3x FY23 revenue.

Based on a 3-year historical core net margin of 2.2%, we anticipate that this project will contribute core earnings of RM3.1mn throughout the construction period.

Forecast

After performing some housekeeping on our earnings model, we tweak our FY24 earnings estimate upward by 0.2%.

Valuation

We keep our target price unchanged at RM0.52 based on a target PER of 12x against CY25 earnings. Nevertheless, we are downgrading our call to Sell from Buy previously, as the stock appears to be fairly valued following its recent significant price surge.

Source: TA Research - 27 May 2024