Econpile secures RM27 million job in Section 13, PJ

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KUCHING: Econpile Holdings Bhd (Econpile) has continued on its winning streak since its listing last June with another job win worth RM26.7 million from Vistayu Sdn Bhd.

AmResearch Sdn Bhd (AmResearch) said that the group announced on Bursa Malaysia that its wholly-owned subsidiary, Econpile Sdn Bhd had received the letter of award to undertake piling and substructure works of a proposed mixed development in Section 13, Petaling Jaya.

The duration of the contract is 62 weeks and the job is expected to be completed by July 2016 it explained.

“This is Econpile’s ninth major job win since its listing – bringing the total value of jobs won so far to RM440.4 million.

“With this, we estimate Econpile’s outstanding order book to amount to circa RM500 million currently, which will keep the group busy for the next 20 months,” said the research house.

“While the latest win has exceeded our new order book assumption of RM420 million for FY15 forecast, we maintain our numbers as contributions from the latest win will only flow through strongly from FY16 forecast onwards.

“The latest win affirms our investment thesis of topline growth and margin expansion for the group. Recall that its net margin had consistently expanded to 11 per cent in third quarter FY15 (3QFY15), from 6.5 per cent in 4QFY14 on the back of higher recognition of property-related jobs.”

The research house expect margins to improve further as its KVMRT1 jobs (which yield lower margin) were completed in February.

For the nine month period, the gross profit margin for property-related jobs was 19 per cent against five per cent for infrastructure jobs.

At its recent analyst briefing, management assured of prospects remaining bright with a tender book of roughly RM1 billion. It is also in good position to secure piling jobs for the upcoming KVMRT2 project.

AmResearch also highlighted that the company has also invested RM28.9 million in capital expenditure for new machineries this year in anticipation of new job wins.