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Bina Puri Holdings Bhd (Aug 2, RM0.40)
Maintain hold with a lower target price (TP) of 43.5 sen from 45.5 sen: Bina Puri Holdings Bhd has accepted the award from Arus Sutera Sdn Bhd for the role of project management consultant for the design and build of 440 flat units (5-storey walk-up flats) and associated works for Program Perumahan Rakyat (PPR), in Pitas, Sabah.
The contract sum is RM80 million, with a project duration of 42 months.
This is the third construction job win for Bina Puri in 2016 after securing work packages at Pengerang, Johor and Pan Borneo Highway in Sarawak.
The new job brings the year-to-date contract wins to RM561 million.
The outstanding construction order book stands at an estimated RM2 billion, about 1.9 times of financial year 2015’s (FY15) construction revenue.
Assuming a profit before tax (PBT) margin of 3%, the project is expected to contribute RM1.8 million of net profit or 0.8 sen per share throughout the construction period.
No change to our FY16 earnings forecast as the job win is within our order book replenishment assumption of RM1 billion.
We adjust the TP from 45.5 sen to 43.5 sen, after factoring in enlarged share base arising from the recent private placement and employee share option scheme.
The valuation is based on unchanged 7 times calendar year 2017 earnings per share.
Maintain our “hold” call on the stock. — TA Securities Holdings Bhd, Aug 2
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This article first appeared in The Edge Financial Daily, on Aug 3, 2016. Subscribe to The Edge Financial Daily here.
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