Hong Leong maintains "buy" call for Hock Seng Lee, TP RM2.09

Hong Leong maintains "buy" call for Hock Seng Lee, TP RM2.09
Business & Markets 2013
Written by Charlotte Chong at theedgemalaysia.com
Monday, 15 April 2013 10:41


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KUALA LUMPUR (APRIL 15): Hong Leong Investment Bank Bhd maintained a ‘buy’ call for HOCK SENG LEE BHD [] (HSL) with an unchanged target price of RM2.09 on the back of two projects worth RM81 million which the builder clinched recently.

In a note today, Hong Leong said the latest contract value from Sarawak was of decent size, making up 14% of HSL's financial year 2012’s CONSTRUCTION [] revenue and 7.7% of its previous outstanding order book of RM1.05 billion.

The research house said : “Assuming a profit after tax margin of 10%, this project will translate to about 1.5 sen per share for HSL”.

Year-to-date, HSL has secured RM129.9 million worth of projects, making up 26% of Hong Leong's annual order book replenishment assumption of RM500 million for financial year 2013, according to the research firm.

Of the RM81 million worth of projects secured recently, RM64.5 million is for road works due to be completed by second quarter of 2015, while RM16.5 million is for drainage diversion works due to be finalised by first quarter of 2014.

The two infrastructure-related projects were awarded by Lembaga Kemajuan Bintulu.