The company said in a stock exchange filing that the contract was awarded to unit Econpile (M) Sdn Bhd (EMSB) following an agreement the latter had signed with Mujur Minat Sdn Bhd (MMSB) on Monday
KUALA LUMPUR: AmInvestment Bank has maintained a “buy” on Econpile Holdings Bhd
with an unchanged fair value of RM1.90 per share pegging it at 14 times FY17 forecast price-earnings (PE).
“All in, continue to like Econpile for its strong track record as a leading piling specialist, continued contracts wins on resilient demand, and stable margins. Since its listing, net margin has expanded from 6.5% to 15%,” it said.
The piling and foundation contractor announced that it had secured a contract for foundation and substructure works worth RM208mil from Oxley Rising Sdn Bhd. The duration of the contract is 26 months.
The contract comprises bored piling and pilecaps, diaphragm, earthworks, foundation and substructure works of a mixed commercial development comprising hotels, branded residences, offices and retails.
“We are pleasantly surprised with the latest win – which brings Econpile’s new job wins in FY16 forecast to RM655mil (FY15: RM490mil). This has surpassed our replenishment target of RM500mil by 31%,” AmInvestment said.
It believes that any jobs secured this month would only contribute strongly to the group’s earnings from FY17 forecast. Hence, it make no changes to its numbers. For FY17 forecast, it have a new order book target of RM450mil with potential upside.
“The latest win is timely as 20% of the group’s capacity will be freed up following the completion of a few projects next month. Given the scope and nature of the latest job, we believe margins should be attractive. Outstanding order book of RM778mil will support earnings until 2018,” AmInvestment said.
It believes more jobs would flow through in the coming months with potential wins from KVMRT2, highways (SUKE, DASH, DUKE).
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