Hot Stock Willowglen MSC gains 3.5% on Singapore contract win

by **Cals** Thu 10 Dec 2015, 00:57

Hot Stock

[size=28]Willowglen MSC gains 3.5% on Singapore contract win

By Gho Chee Yuan / theedgemarkets.com | December 9, 2015 : 11:50 AM MYT

KUALA LUMPUR (Dec 9): Willowglen MSC Bhd ([You must be registered and logged in to see this image.] Valuation: 1.80, Fundamental: 2.55)'s shares surged as much as 2.5 sen or 3.5% in the mid-morning trades after it bagged a RM6.94 million integrated security and operation surveillance system (ISOSS) works in Singapore.

At 11.33am, the stock was trading at 74 sen, the highest point so far today, albeit with a thin trading margin of 152,100 shares, valuing it at RM177.32 million.

Willowglen MSC engages in the research, development, and supply of computer-based control systems.

It told Bursa Malaysia yesterday that it was awarded with the RM6.9 million contract by Incsys Pte Ltd to undertake integrated security and operation surveillance system works in Singapore.

Willowglen MSC said the commencement date of the contract is on Oct 21, 2015 and will be completed by Oct 30, 2017.

In a note to clients today, Maybank Investment Bank Research said with this contract win, Willowglen MSC has secured a total of RM36.5 million jobs year-to-date (y-t-d), equivalent to 33% of financial year 2014 (FY14) revenue.

"Its key markets continue to be Singapore and Malaysia, with 72% of cumulative nine months period (9MFY15) revenue derived from its Singapore operations while the balance from Malaysia," the reseach firm noted.

Although 9M15 revenue rose 16% on year, Maybank Research believed currency translation effect plays a major role as Singapore dollar has appreciated by 17% against the ringgit from January to September in 2015.

Outlook wise, Maybank Research said the Supervisory Control and Data Acquisition (SCADA) market continues to be competitive, and this is evident from the dwindling profit margins.

"In 9MFY15, pretax profit (PBT) margin fell 4.6 percentage points (ppts) to 15.2%, from 19.8% a year ago," it said.

At current price, the firm said Willowglen is trading at 11.8 times annualized 9MFY15 earnings per share (EPS) of 6.05 sen, above its 3-year historical average price to earnings ratio (PER) of 9.4 times.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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