Stocks In Focus MY (Econpile, Iskandar Waterfront City, MBM Resources) – 22/01/15
Econpile Secures RM129m Piling Job
Econpile Holdings announced that its wholly-owned subsidiary has clinched a RM129 million 23-month piling job from Damai City, the largest contract that the group has obtained since its listing last June. The job consists of bored piling, earthworks, foundation and substructure works for a mixed development project at Jalan Conlay, Kuala Lumpur.
This latest win has swelled the company’s FY15 new order win to RM330 million, causing AmResearch to revise its forecast for new order win upwards to RM400 million. The research house feels that this is achievable as demand for piling jobs continues to be strong with only a few key piling specialists in the market.
The research house forecasts a FY15 revenue and net profit growth of 16.5 percent and 60 percent on the back of increased jobs. FY15 net margin expansion seems to remain intact as the group continues to secure more property-related jobs that yield better margins. Thus far, the group’s net margin has improved by 2.5 percent in FY15.
Significance: AmResearch still perceives Econpile as a strong beneficiary of rising job flow with a strong execution and concerted efforts to improve margin. Hence, it maintains its ‘Buy’ call on the company with a higher fair value of RM1.40 a share.
IWCB Enters Into RM2.4b Land Transaction with China-Based Greenland
Just as the Johor property scene is experiencing a heightened state of wariness, Iskandar Waterfront City (IWCB) unit Southern Crest Development has established a joint venture (JV) with a subsidiary of Shanghai-based state developer Greenland Holdings Group to buy 128 acres of mostly submerged land from IWCB for a sum of RM2.4 billion.
Johor state government-linked IWCB and Greenland will spend 15 years developing an RM3 billion new waterfront city on the land in Tebrau Bay together. The Johor government had chosen Greenland as a partner because of its experience in the long-term construction of a city in hopes that Greenland will help it transform Johor Baru into a modern international waterfront city and destination.
At a time when the lacklustre response from buyers for property launches in Puteri Harbour and Tanjung Puteri Cove raises concerns about the oversupply of high-end condominiums in Johor, the transaction sends a strong signal to the investment market that Iskandar Malaysia is still a destination for property development in the long run.
Significance: The deal represents the highest land transactions in Iskandar to date and the joint venture is seen to allow IWCB to leverage on its Chinese partner’s strength in mixed commercial development to reshape its waterfront land in Danga Bay and Tebrau Bay.
MBM’s 2015 And 2016 Forecast Earnings Raised
AmResearch has raised MBM Resources’ FY15 and FY16 forecast earnings by 9 percent and 14 percent to factor in higher total industry volume (TIV) expectations for Perodua, bringing its revised projections 5 percent and 10 percent higher than consensus.
The research house notes that the company’s share price fell 13 percent over the past 12 months on the back of stalling Perodua TIV, weak earnings from discounting and absence of an A-segment model between July and August 2014, start-up cost of its new plant as well as the doubling of losses from Oriental Metal Industries (M)’s alloy wheel unit.
Nevertheless, it notes that the group’s earnings prospects have improved tremendously as a result of strong momentum from the Axia which garnered over 70,000 bookings. The present production rate is expected to maintain Perodua’s TIV throughout the difficult 1H15.
Significance: AmResearch upgrades MBM to ‘Buy’ with a fair value of RM3.40. It feels that the potential implementation of Malaysia’s “cash for clunkers” programme could be a strong catalyst for Perodua since models in the national car price segment are likely to benefit most from the mooted RM5,000.
http://www.sharesinv.com
Econpile Secures RM129m Piling Job
Econpile Holdings announced that its wholly-owned subsidiary has clinched a RM129 million 23-month piling job from Damai City, the largest contract that the group has obtained since its listing last June. The job consists of bored piling, earthworks, foundation and substructure works for a mixed development project at Jalan Conlay, Kuala Lumpur.
This latest win has swelled the company’s FY15 new order win to RM330 million, causing AmResearch to revise its forecast for new order win upwards to RM400 million. The research house feels that this is achievable as demand for piling jobs continues to be strong with only a few key piling specialists in the market.
The research house forecasts a FY15 revenue and net profit growth of 16.5 percent and 60 percent on the back of increased jobs. FY15 net margin expansion seems to remain intact as the group continues to secure more property-related jobs that yield better margins. Thus far, the group’s net margin has improved by 2.5 percent in FY15.
Significance: AmResearch still perceives Econpile as a strong beneficiary of rising job flow with a strong execution and concerted efforts to improve margin. Hence, it maintains its ‘Buy’ call on the company with a higher fair value of RM1.40 a share.
IWCB Enters Into RM2.4b Land Transaction with China-Based Greenland
Just as the Johor property scene is experiencing a heightened state of wariness, Iskandar Waterfront City (IWCB) unit Southern Crest Development has established a joint venture (JV) with a subsidiary of Shanghai-based state developer Greenland Holdings Group to buy 128 acres of mostly submerged land from IWCB for a sum of RM2.4 billion.
Johor state government-linked IWCB and Greenland will spend 15 years developing an RM3 billion new waterfront city on the land in Tebrau Bay together. The Johor government had chosen Greenland as a partner because of its experience in the long-term construction of a city in hopes that Greenland will help it transform Johor Baru into a modern international waterfront city and destination.
At a time when the lacklustre response from buyers for property launches in Puteri Harbour and Tanjung Puteri Cove raises concerns about the oversupply of high-end condominiums in Johor, the transaction sends a strong signal to the investment market that Iskandar Malaysia is still a destination for property development in the long run.
Significance: The deal represents the highest land transactions in Iskandar to date and the joint venture is seen to allow IWCB to leverage on its Chinese partner’s strength in mixed commercial development to reshape its waterfront land in Danga Bay and Tebrau Bay.
MBM’s 2015 And 2016 Forecast Earnings Raised
AmResearch has raised MBM Resources’ FY15 and FY16 forecast earnings by 9 percent and 14 percent to factor in higher total industry volume (TIV) expectations for Perodua, bringing its revised projections 5 percent and 10 percent higher than consensus.
The research house notes that the company’s share price fell 13 percent over the past 12 months on the back of stalling Perodua TIV, weak earnings from discounting and absence of an A-segment model between July and August 2014, start-up cost of its new plant as well as the doubling of losses from Oriental Metal Industries (M)’s alloy wheel unit.
Nevertheless, it notes that the group’s earnings prospects have improved tremendously as a result of strong momentum from the Axia which garnered over 70,000 bookings. The present production rate is expected to maintain Perodua’s TIV throughout the difficult 1H15.
Significance: AmResearch upgrades MBM to ‘Buy’ with a fair value of RM3.40. It feels that the potential implementation of Malaysia’s “cash for clunkers” programme could be a strong catalyst for Perodua since models in the national car price segment are likely to benefit most from the mooted RM5,000.
http://www.sharesinv.com
