KUALA LUMPUR: Wah Seong Corporation Bhd (Wah Seong) is set to benefit from Australia’s current booming liquefied natural gas (LNG) market given its strong foothold in Asia-Pacific and excellent track record in pipe coating, says HwangDBS Vickers Research Sdn Bhd (HwangDBS Research).
Wah Seong has been awarded a US$45 million (RM137 million) pipeline coating contract by Australia Pacific LNG Pty Ltd for the APLNG project in Australia.
HwangDBS said the contract win was a positive development as this underlines Wah Seong’s competitiveness in the Australian pipeline coating market.
“This will be Wah Seong’s second major LNG coating job in Australia after securing Gorgon LNG contract in November 2009,” it said.
The contract was expected to commence in the fourth quarter of this year and would be completed by 2012.
HwangDBS said Wah Seong’s financial year 2011 earnings forecast increased by four per cent should the work recognition start by fourth quarter of this year.
Meanwhile, OSK Research Sdn Bhd (OSK Research) has no change in its financial year 2011-2012 forecasts on Wah Seong because it has factored in some orderbook replenishment for its pipe coating division.
Wah Seong’s orderbook should be closed to RM1.5 billion now.
Besides the Australia Pacific LNG project, other notable pipe coating projects include Gladstone LNG, Wheatstone LNG and Kebabangan.
OSK Research maintained a buy call on Wah Seong and continue to like the company for its market leadership position in the pipe coating and corrosion protection services in Asia.
Furthermore, with the joint venture formed with Insituform recently, OSK Research believed this would give an opportunity for Wah Seong to move outside Asia and penetrate into the United States, Brazil and Gulf of Mexico markets. — Bernama