Stock Name: SALCON
Company Name: SALCON BHD
Research House: OSK
KUALA LUMPUR: OSK Research has initiated coverage of Slacon Bhd with a Buy at 81 sen as the company focuses on water engineering and water related concession. The research house said on Tuesday, April 6 that it sees Salcon supported by its growing CONSTRUCTION [] orderbook in the next few years and securing more water and wastewater concessions in China. "Seeing that its earnings will gradually improve in the coming years, we initiate coverage on Salcon with an SOP-derived target price of RM0.81 on the stock. BUY recommended," it said. OSK Research said it ascribed a 12-month target price of 81 sen for Salcon, which translates into an upside of 12.5% based on its current share price. It said the stock's target price is based on a sum-of-parts approach valuing its concession operations at RM0.41 (WACC; 12%) while applying a PE of 9 times on its FY10 construction EPS of 4 sen per share. Our 9.0 times construction PE is based on the average PE for small cap construction companies," it said.
Company Name: SALCON BHD
Research House: OSK
KUALA LUMPUR: OSK Research has initiated coverage of Slacon Bhd with a Buy at 81 sen as the company focuses on water engineering and water related concession. The research house said on Tuesday, April 6 that it sees Salcon supported by its growing CONSTRUCTION [] orderbook in the next few years and securing more water and wastewater concessions in China. "Seeing that its earnings will gradually improve in the coming years, we initiate coverage on Salcon with an SOP-derived target price of RM0.81 on the stock. BUY recommended," it said. OSK Research said it ascribed a 12-month target price of 81 sen for Salcon, which translates into an upside of 12.5% based on its current share price. It said the stock's target price is based on a sum-of-parts approach valuing its concession operations at RM0.41 (WACC; 12%) while applying a PE of 9 times on its FY10 construction EPS of 4 sen per share. Our 9.0 times construction PE is based on the average PE for small cap construction companies," it said.
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