KUALA LUMPUR: Naim Indah Holdings Bhd’s strong sales performance will translate into sound financial results over the next two years, a research house said today.
HwangDBS Vickers Research said backed by strong property sales in Sarawak, buoyed by the booming oil and gas industry, Naim has generated RM184 million sales in the 2011 financial year, the best since financial year 2007.
“Now its unbilled sales stand at RM176 million and take-up rate for its new launches has been strong,” it said in a research note.
Riding on the booming infrastructure spending, HwangDBS said its construction order book now stands at RM1.1 billion, more than enough to sustain three years earnings, given the relatively low annual burn rate of RM250-RM300 million.
It said the latest mass rapid transit contract won by Naim worth RM208 million also underpinned its competitiveness as it was the first Sarawak-based contractor to be awarded one of the main packages of the My Rapid Transit project.
“Future prospects remain bright with the development of the Sarawak Corridor of Renewable Energy, in which Naim is poised to be one of the largest beneficiaries as the local champion,” it added.
On another issue, the research house said although there were concerns over Naim selling its stakes in Dayang Enterprise Holdings Bhd, the transaction was unlikely to happen.
“Naim’s earnings will be severely eroded without Dayang’s contributions as it remains a major contributor at 34 per cent of group earnings in the first quarter of this year,” it said.
The management was optimistic of Dayang’s future prospects, given its strong RM1.4 billion order book providing long-term earnings visibility, it said.
The research house has put a “trading buy” call on this counter.
As at 11.03am, Naim’s shares rose four sen to RM1.81, with 473,100 shares traded. – Bernama