Stock Name: TRC
Company Name: TRC SYNERGY BHD
TRC Synergy Bhd
(Oct 17, 64 sen)
Maintain buy at 61 sen with target price of 70 sen: TRC has been awarded a RM318.9 million contract by the Brunei Economic Development Board for the modernisation of the Brunei International Airport terminal. The contract is a joint venture between TRC (51%) and Swee Sdn Bhd (49%) of Brunei. The duration of the contract is 36 months. This contract brings year-to-date wins to RM252 million (excluding the RM950 million LRT extension project clinched in January 2011 and assuming its 51% share), raising its order book to RM1.25 billion. Given the project was via open tender, we expect margins to be competitive at 5% to 6%. With this win, our balance of new order wins assumption for FY11 is RM140 million. We leave our forecasts unchanged.
This project award was via an international tender, which attracted interest from contractors from Asean countries, China, Japan, Korea, India, Turkey and the United Arab Emirates. We expect execution risk to be minimal given its experience in airport projects such as the upgrading of Kuala Terengganu, Sibu and Labuan Airports. Swee is a reputable contractor registered with the Public Works Department of Brunei Darussalam as a Class VI Licence contractor.
We maintain our 'buy' rating and target price of 70 sen based on 10.5 times CY12 fully diluted earnings per share. Its balance sheet is also strong with 25 sen net cash per share. Another key catalyst is the MRT, where TRC is one of 28 contractors shortlisted to bid for works for the elevated works for the Sungai Buloh-Kajang line. It is present in all categories, elevated civil works, stations and depots, in both the open and bumiputera categories. ' HwangDBS Vickers Research, Oct 17
This article appeared in The Edge Financial Daily, Ocotber 18, 2011.
Company Name: TRC SYNERGY BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 0.70 |
TRC Synergy Bhd
(Oct 17, 64 sen)
Maintain buy at 61 sen with target price of 70 sen: TRC has been awarded a RM318.9 million contract by the Brunei Economic Development Board for the modernisation of the Brunei International Airport terminal. The contract is a joint venture between TRC (51%) and Swee Sdn Bhd (49%) of Brunei. The duration of the contract is 36 months. This contract brings year-to-date wins to RM252 million (excluding the RM950 million LRT extension project clinched in January 2011 and assuming its 51% share), raising its order book to RM1.25 billion. Given the project was via open tender, we expect margins to be competitive at 5% to 6%. With this win, our balance of new order wins assumption for FY11 is RM140 million. We leave our forecasts unchanged.
This project award was via an international tender, which attracted interest from contractors from Asean countries, China, Japan, Korea, India, Turkey and the United Arab Emirates. We expect execution risk to be minimal given its experience in airport projects such as the upgrading of Kuala Terengganu, Sibu and Labuan Airports. Swee is a reputable contractor registered with the Public Works Department of Brunei Darussalam as a Class VI Licence contractor.
We maintain our 'buy' rating and target price of 70 sen based on 10.5 times CY12 fully diluted earnings per share. Its balance sheet is also strong with 25 sen net cash per share. Another key catalyst is the MRT, where TRC is one of 28 contractors shortlisted to bid for works for the elevated works for the Sungai Buloh-Kajang line. It is present in all categories, elevated civil works, stations and depots, in both the open and bumiputera categories. ' HwangDBS Vickers Research, Oct 17
This article appeared in The Edge Financial Daily, Ocotber 18, 2011.
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