Stock Name: MUDAJYA
Company Name: MUDAJAYA GROUP BHD
Alliance Research has maintained its 'neutral' call on the Mudajaya Group, given the projected earnings decline this year and no immediate contract win potential for key domestic project rollouts.
"Mudajaya's orderbook stands at RM2.6 billion (1.8x Financial Year 2012 construction revenue). We feel that new job wins are likely to fall short of its orderbook burn rate," it said in a research note today.
"Our estimates impute RM500 million in annual orderbook replenishment from Financial year 2013-2015.
"With this, revenue should be on a declining trend, unless sizable job wins materialise," it added.
It also forecast Financial Year 2013 earnings for the
construction-cum-energy player to decline by 17 per cent year-on-year, given the drop in topline growth.
"Our earning growth of 16 per cent and six per cent for Financial Year 2014-2015 hinges heavily on associate contributions from Indian partner RKM Powergen, once the Chhattisgarh independent power producer (IPP) plant
commences.
"Overall, our Financial Year 2013-2014 earnings are cut by 24.3 per cent and 16 per cent, respectively.
"The lower sum of parts (SOP) discount offsets the impact of our earnings cut and our target price is raised marginally from RM2.85 to RM2.93 (3.7 per cent upside)," Alliance Research said.-- Bernama
Company Name: MUDAJAYA GROUP BHD
| Research House: ALLIANCE | Price Call: HOLD | Target Price: 2.93 |
Alliance Research has maintained its 'neutral' call on the Mudajaya Group, given the projected earnings decline this year and no immediate contract win potential for key domestic project rollouts.
"Mudajaya's orderbook stands at RM2.6 billion (1.8x Financial Year 2012 construction revenue). We feel that new job wins are likely to fall short of its orderbook burn rate," it said in a research note today.
"Our estimates impute RM500 million in annual orderbook replenishment from Financial year 2013-2015.
"With this, revenue should be on a declining trend, unless sizable job wins materialise," it added.
It also forecast Financial Year 2013 earnings for the
construction-cum-energy player to decline by 17 per cent year-on-year, given the drop in topline growth.
"Our earning growth of 16 per cent and six per cent for Financial Year 2014-2015 hinges heavily on associate contributions from Indian partner RKM Powergen, once the Chhattisgarh independent power producer (IPP) plant
commences.
"Overall, our Financial Year 2013-2014 earnings are cut by 24.3 per cent and 16 per cent, respectively.
"The lower sum of parts (SOP) discount offsets the impact of our earnings cut and our target price is raised marginally from RM2.85 to RM2.93 (3.7 per cent upside)," Alliance Research said.-- Bernama
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