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CBIP wins RM33m contract in Indonesia

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CBIP wins RM33m contract in Indonesia Empty CBIP wins RM33m contract in Indonesia

Post by Cals Wed 16 Oct 2013, 13:50

CBIP wins RM33m contract in Indonesia
Business & Markets 2013
Written by AmResearch   
Wednesday, 16 October 2013 09:57
CB Industrial Product Holding Bhd
(Oct 14, RM2.87) 
Maintain buy at RM2.90 with a fair value of RM3.50: CBIP announced that it had been awarded a RM33 million contract by PT Bumitama Gunajaya Agro for the construction of a 60 tonne per hour Modipalm palm oil mill in Central Kalimantan, Indonesia.

We view the award positively as it would increase CBIP’s construction order book and sustain its long-term profit growth.

Also, we believe that this is CBIP’s first contract from Bumitama.

Year-to-date, we estimate that CBIP has secured RM320 million worth of contracts.

In 2012 financial year ended Dec 31 (FY12), the group received RM280 million worth of contracts. Its unbilled order book stood at RM420.9 million as at end-June 2013. This is about 0.8 times the mill division’s revenue in FY12. Each contract normally lasts between 12 and 18 months.

CBIP is also enjoying positive demand from companies in South America and Africa and currently has six contracts from the two continents. We estimate that about 5% of CBIP’s customers are from South America and Africa.

We maintain a “buy” on CBIP for its undemanding valuations. The group is currently trading at a FY14F price-earnings ratio of eight times. — AmResearch, Oct 14


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This article first appeared in The Edge Financial Daily, on October 16, 2013.
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