HSL rides on Sarawak’s growth – Analyst
Posted on June 23, 2012, Saturday
KUCHING: Hock Seng Lee Bhd (HSL) will benefit further from Sarawak’s growth path via the Sarawak Corridor of Renewable Energy (SCORE) on the back of contract rollout stemming from the corridor’s development projects.
In an announcement filed with Bursa Malaysia, the group stated that it had received a letter of acceptance from the Ministry of Industrial Development Sarawak for infrastructure works at Demak Laut Industrial Park.
The contract worth RM26 million would cover earthworks, sand filling, water reticulation, drainage, road and associated works scheduled to be completed by January 2014.
In view of the contract win, OSK Research Sdn Bhd (OSK Research) noted, “Including this contract, HSL would have secured RM182 million worth of new projects year-to-date against full-year financial year 2011’s (FY11) RM313 million and our FY12 orderbook replenishment target of RM400 million.
“As we deem these contracts within expectations, we make no changes to our forecasts at this juncture.”
HSL’s current outstanding orderbook stands at approximately RM1.1 billion.
“Going forward, we continue to expect more jobs to flow from SCORE.
“This could benefit contractors like HSL, which has a strong presence in Sarawak.
“SCORE has so far attracted 17 projects worth a total of RM24.6 billion,” the research house said as left its fair value on the stock unchanged at RM1.99 per share.
“We featured the stock as one of our Small Cap Jewels this year, and continue to like HSL for its niche in marine engineering, established execution track record as well as sturdy books, and net cash per share of RM0.33 as of first quarter FY12,” the research house highlighted.