KUCHING: The possibility of Hock Seng Lee Bhd (HSL) clinching the second package for Kuching’s centralised wastewater management system was in line with analytical assumptions.
Given that HSL’s newly secured order for the year of RM129 million was 21.5 per cent of its FY14 orderbook replenishment assumption of RM600 million, researchers at Hong Leong Investment Bank Bhd (Hong Leong Research) said any additional new contracts secured would be positive towards reaching Hong Leong Research’s assumption.
“Moreover, depending on the potential amount from package 2 of KCWMS (which could be relatively sizeable to HSL in view of RM530 million package 1), it may exceed our assumption for FY14.”
This led Hong Leong Research to remain positive about the company in securing more new contracts given its niche in Sarawak as well as marine engineering and mass reclamation.
“However, we are maintaining our earnings forecasts for now pending actual awards.”
Hong Leong Research estimated that HSL’s outstanding orde book is circa RM1.3 billion, which translates to about 2.5 times FY13’s construction revenue and approximately 1.2 times order book-to-market capitalisation ratio.
Meanwhile in a separate note, AmResearch Sdn Bhd also maintained its new order assumption of RM600 million for the year as well as its forecasts numbers.