s new contract win, Maybank Investment Bank Research is positive over the group s improving prospects and opportunities ahead. Valuations are still undemanding (6-8x FY22-23 PER), for the market has yet to fully embrace the strength of the earnings turnaround outlook, especially for its Qatari and Malaysia prospects, which would feature prominently from FY22, it said in a note.
The research house, which has a buy call and target price of RM1.20 on Wah Seong, maintained its earnings estimates on epectation of its orderbook growing to RM2bil by FY21. Winning the Qatar pipe-coating jobs would be a key catalyst, for they would offer a similar earnings impact to the completed NordStream2 project.
Restructuring of BIMB will allow proper re-rating of Bank Islam
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following the recent earnings result, which indicated the group was en route to recovery.
For the first quarter of 2021, the group s net profit was RM1.53mil, a 15.1% jump over the previous corresponding quarter.
MIDF Research, which maintained its buy call, said while the earnings recovery in 1Q was unsurprising, the pace of earnings growth was somewhat unexpected given the implementation of MCO2.0 in the quarter.
It added that this suggests the group will weather the recently imposed MCO3.0 and that its asset quality and conservative approach to its credit profile will mean it will weather the short-term stress. With the expectation that the situation is turning around especially with the rollout of the Covid-19 vaccine and recovery in the GDP, we are maintaining our buy with revised TP of RM5.10 (from RM4.85) as we rollover our valuation to FY22, pegging its FY22 BPS to PBV of 2.0x, said MIDF.
KUALA LUMPUR: Maybank Investment Bank Research has downgraded Velesto to sell from buy and cut its target price to 11 sen or by 63% from 16 sen as it cut the earnings outlook due to the operational setback on its Naga 7 rig.
The research house said on Tuesday it had cut the FY21-23 earnings by 58%-144% and there was a change in view to reflect the uncertainty over the rig’s long-term availability at this juncture.
Based on various sources gathered, an unfortunate incident happened to Velesto’s Naga 7 rig during operations. One of its legs “punched through” during first preloading, which resulted in the rig tilting around 10 degrees.
Malaysian construction firms with projects in India could take Covid hit 29 Apr 2021 / 22:20 H. A nurse displaying a vial of the AstraZeneca Covid-19 vaccine manufactured by Serum Institute of India, at a medical centre in Mumbai. India is grappling with a surge in Covid-19 infections. – REUTERSPIX
PETALING JAYA: Earnings of Malaysian construction groups IJM Corp Bhd and Sunway Construction Group Bhd (SunCon) could be negatively impacted as Covid-stricken India, where they have a presence, grapples with the high number of infections, said Maybank Investment Bank Research (Maybank IB Research).
“Based on scenario analysis, our FY22 net profit forecast for IJM could be negatively impacted by 7%, and FY21 net profit for SunCon by 9%,” said the research house, while maintaining its forecasts and target prices for now.
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