Hong Leong retains "buy" on CB Industrial, TP RM3.42

Hong Leong retains "buy" on CB Industrial, TP RM3.42
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Monday, 08 July 2013 14:45

KUALA LUMPUR (July 8): Hong Leong Investment Bank Research (HLIB) has retained its “buy” rating on CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP) with an unchanged target price (TP) of RM3.42.

This came despite the palm oil mill parts manufacturer announced it had won a three-year contract worth RM136.8 million from the government.

In a note today, HLIB analyst Chye Wen Fei explained that the target price was retained because the research house has already taken into account this contract win in its forecast for CBIP’s special purpose vehicle division.

Nonetheless, Chye said the contract win is “positive” for CBIP, as “this reaffirms our positive view on the company’s earnings outlook.”

Last Friday, the company announced its 51%-owned subsidiary AVP Engineering (M) Sdn Bhd had received a letter of award from the Ministry of Housing and Local Government Malaysia to supply, deliver, install, test and commission 100 units of prime mover vehicle attached with water tank trailer to the Fire and Rescue Department of Malaysia.

The contract runs for three years and has a total value of RM136.8 million.

As of 2:30 pm, the palm oil mill parts manufacturer shares were traded six sen or 2.1% higher at RM2.92. A total of 815,500 shares were transacted.