Bina Puri Holdings

Bina Puri Holdings Bhd (Sept 4, 36.5 sen)

Maintain hold: Bina Puri Holdings Bhd has accepted a letter of award from Toyo Engineering & Construction Sdn Bhd to undertake a project known as Civil Work in Progress Area B — 2130, 2140, 2150 and 2170 for the refinery and petrochemical integrated development or Rapid steam cracker complex for a contract sum of RM94.9 million, to be completed within a period of 27 months from January 2016.

This is the sixth construction job win for Bina Puri in 2015, bringing the total win year to date to RM932.9 million. Its outstanding construction order book stands at about RM2.7 billion, about 3.3 times of financial year 2014 (FY14) construction revenue.

Assuming a profit before tax margin of 3%, the project is expected to contribute RM2.1 million of net profit or one sen per share throughout the construction period.

The order book replenishment has been encouraging with a total of RM932.9 million new orders secured year to date.

Therefore, we raise our order book replenishment assumption for FY15 from RM1 billion to RM1.1 billion. As a result, we raise FY16 and FY17 earnings forecasts by 3.6% and 2.8% respectively.

Subsequent to the earnings revision, we tweak the target price higher from 37 sen to 38 sen, based on an unchanged 7 times FY16 earnings per share. Maintain our “hold” call on Bina Puri, given a total potential return of 12.7%, including an expected dividend yield of 5.6%. — TA Securities, Sept 3

This article first appeared in the digitaledge DAILY on Sept 7, 2015. Subscribe here.

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