Haily Group shares soar to new record high following contract win

• Year-to-date, the counter has gained over 91%, tracking a broad rally in the construction sector largely fuelled by optimism about the government's rollout of major infrastructure projects and contract awards in the private sector.

KUALA LUMPUR (July 19): Shares in Haily Group Bhd (KL:HAILY) surged on Friday to a new all-time high since the construction company's listing three years ago, after announcing a contract win.

Haily rose as much as 10% or eight sen to 85 sen. The stock then pared gains to trade at 83.5 sen at 9.10am, giving the company a market capitalisation of RM163.79 million on Bursa Malaysia. Trading volume totalled 5.4 million shares so far, nearly triple the 20-day moving average.

No institutional analyst covers the stock.

The stock is currently trading at a little over 20 times 2023’s earnings per share of 4.12 sen, compared to the Bursa Malaysia Construction Index’s valuation at over 42 times the trailing earnings.

Year-to-date, the counter has gained over 91%, tracking a broad rally in the construction sector largely fuelled by optimism about the government's rollout of major infrastructure projects and contract awards in the private sector.

In the first half of 2024, contract awards totalled RM88.92 billion from over 7,000 projects, according to data from the Construction Industry Development Board.

Private sector projects account for 75% of the contracts awarded. Non-residential contracts accounted for 73% of the awards while infrastructure made up about 16% of the jobs. The rest were for residential and social amenities.

On Thursday, the builder said its wholly owned unit Haily Construction Sdn Bhd secured a RM76.65 million contract to construct 171 units of link houses in Kempas Baru, Johor Bahru.

Just last week, Haily announced a one-for-one bonus share plan followed by a one-for-two free warrants issue. The warrants will have a tenure of three years.

For the first quarter ended March 31, 2024, Haily’s net profit fell 17.57% year-on-year to RM1.53 million due to lower profit margins and higher expenses. Revenue, meanwhile, rose 6.03% to RM72.11 million, contributed by the Mutiara Maju and Taman Impian Emas projects, among others.

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