Sunway Holdings, Protasco, Hock Seng Lee and Naim Holdings in 50 Jewels 2010 list

KUALA LUMPUR: Sunway Holdings Bhd and Protasco Bhd joined two other construction firms on the Top 50 Malaysian Small Cap Companies (50 Jewels) 2010 list by OSK Research.

The other two are Hock Seng Lee Bhd (HSL) and Naim Holdings Bhd, which are among 31 companies retained on the list from last year. Naim Holdings also made into the Top 10 list.

The research house said Sarawak-based Naim Holdings and HSL are the beneficiaries of strong infrastructure spending in Sarawak by the government.

Naim Holdings currently has an orderbook of RM1.3 billion and has a good chance of landing more domestic jobs in future. It holds a letter of intent (LOI) for the supply and installation of equipment for a college in Sarawak worth RM100 million and OSK Research expected the project to materialise into an award in 2H2010.

“Naim is also eyeing some Sarawak-based jobs, namely an affordable housing project (RM150 million), a resettlement village for relocated residents near Bengoh Dam (RM200 million) and a road project (RM250 million),” it added.

OSK Research said the contractor’s overseas venture in Fiji and Libya will reap harvest soon, while 36%-associate Dayang Enterprise will also contribute to Naim Holdings with its orderbook balance of RM708 million.

HSL, with niche expertise in marine engineering, has completed 12% to 13% of the Kuching Wastewater project Phase 1 (RM452 million). OSK Research said the contractor will likely bag subsequent packages of the project with a total value of RM3 billion, as it has the required equipment and expertise. Phase 2 could be awarded this year.

HSL currently has an orderbook of RM1.2 billion and it is looking at an orderbook replenishment of RM400 million to RM500 million for FY2010. It is eyeing work scheduled under Sarawak Corridor of Renewable Energy (SCORE) -- the Murum Dam access road (RM600 million to RM700 million) and the Nangamerit road project (RM1.2 billion to RM1.4 billion).

“We also believe that HSL could potentially participate in some packages of the Halal Hub (RM2 billion) project under SCORE,” the research house added.

The contractor will be launching the RM800 million high-end LaPromenade development in 2H2010. The research house also expected profits of The Leaf development, with gross development value (GDV) of RM34 million, to be recognised in FY2010 as the construction works in underway.

Protasco is a key player in the road construction segment with an orderbook balance of RM517.2 million. Maintenance business and its skills of mastering the recycling method of road re-layering has helped the company achieve cost savings of as high as 20%. It also holds three concessions for the maintenance of federal roads.

One of the concessions held by Protasco provides the government a range of engineering-related services.  It is expiring in December next year (15-year concession valued at RM348.3 million; outstanding value at RM50 million) and the contractor is looking to extend the concession.

Locally, it is also eyeing other long-term road maintenance contracts (RM30 million per annum), and OSK Research did not discount the possibility of the contractor securing more jobs for its overseas venture in Libya due to its track record.

It has a project in Kajang called Ikram Park. There are plans to launch some commercial development worth RM800 million in the near future at the same location.

With an orderbook balance of RM3 billion, Sunway Holdings is currently tendering for RM16 billion worth of jobs – RM9 billion of which will be in Malaysia. OSK Research believes contract flows will remain strong for Sunway, underpinned by more project roll outs under the 10MP.

Besides the developments for its sister company, Sunway City Bhd, the contractor is expected to get more projects from other countries such as Abu Dhabi’s Arzanah Development and road contracts in India. In Singapore, the contractor will be launching another HDB development in Jalan Senang District 14 (GDV of RM984.2 million) in which it will have a 30% stake.

Sunway Holdings had also re-entered the quarry business in 2005, and currently has a 10% market share in Malaysia for the aggregate business.

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