KUALA LUMPUR: CIMB Equities Research is retaining AWC Bhd
as one of its top small capitalised picks with an unchanged sum-of-part based target price of RM1.19.
The integrated facilities management company announced that its environment unit STREAM was awarded three contracts worth RM28mil (US$7mil).
The contracts are 1) RM9.5mil (US$2.4mil) for an industrial township in the Delhi Mumbai Industrial Corridor, 2) RM7.8mil (US$2mil) for a new inflight catering facility in Taoyuan International Airport, Taiwan, which is a unit of SATS Singapore, and 3) RM10.2mil (US$2.6mil) for the solid waste management for KL118 tower, the tallest building in Malaysia
“The contracts came as a positive surprise. We expect these high-profile wins to open up new market opportunities for STREAM. This is also STREAM’s first contract win in India.
“The SATS win in Taiwan creates new opportunities for STREAM for other SATS locations (more than 20 worldwide),” it said.
CIMB Research said earlier AWC’s plumbing division QDT won a RM62mil plumbing contract for KL118 in January 2016.
It said the STREAM win is testimony to the synergistic potential to cross-sell projects between various divisions – STREAM, plumbing and rainwater.
“This is AWC’s first cross-selling win and augurs well for the group as we have not imputed any synergistic value or contracts in our forecasts and valuations,” it said.
The research house had assumed RM20mil in new contract wins for STREAM in FY17 and these contracts worth RM28mil already surpass its full-year estimate.
This bring STREAM’s outstanding orderbook to an estimated RM130mil. Any new wins going forward will result in EPS upgrades.
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