Monday, September 28

Kenanga Research pegs ‘outperform’ on initiation coverage of HSL

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KUCHING: Hock Seng Lee Bhd (HSL) has been viewed positively by the research firm of Kenanga Investment Bank Bhd (Kenanga Research) on the back of its strong foundation in the marine engineering and construction division.

Analyst Mohd Iqbal Zainal highlights in a recent report: “In terms of market capitalisation, HSL is the biggest listed contractor in Sarawak. It is also the biggest marine-related contractor in the state.”

The analyst also outlined that HSL’s main expertise is not just marine engineering; but also other construction projects such as roads, airports, ports, and buildings.

He explained that the company has expertise in three segments of the construction space which are building, infrastructure (water-related, bridges, highways) and basic amenities (roads, schools, hospitals), which has made HSL a major construction player in Sarawak.

Thus far, its orderbook stands at approximately RM1.1 billion, of which 30 per cent of its projects are within the Sarawak Corridor of Renewable Energy (SCORE) region, the analyst pointed out and noted that the orderbook would last for the next two to three years.

“Interestingly, HSL has consistently secured more than RM500 million contracts per annum since 2012.

“We expect the momentum to continue this year driven by SCORE related projects particularly in Tanjung Manis and Mukah, Kuching Centralised Wastewater System’s Phase 2, and road upgrading works,” he viewed.