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KUALA LUMPUR (June 8): Ibraco Bhd shares rose 2.38% in thin trade this morning after Hong Leong IB Research initiated coverage on Ibraco with a “Buy” rating and target price of 97 sen (upside of 15.5%) based on 35% discount on RNAV of RM1.49.
At 9.14am, Ibraco was up 2 sen to 86 sen with 21,000 shares traded.
In a note today, the research house said it sees FY17 as an inflection point where growth is expected to resume at 3-year earnings CAGR of 37%, bucking the trend of contraction in FY16.
It said Ibraco’s FY17 sales target of RM350 million is double of the previous year of RM150 million-RM180 million and 2.2x of its FY16 revenue.
“Healthy unbilled sales of 1.9x cover ratio and RM4.65 billion of GDV to underpin the projected growth.
“Strong execution record and above industry EBIT margins of 24%-30% to translate growth into robust earnings.
“Consistent dividend policy with expected yield of 4.2% reinforced by a gearing of 0.36x and above improving ROE,” it said. — theedgemarkets.com
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