not vested
Trading Buy: ADVCON - 5281
(Last price: RM0.430, Potential upside +32.6%)
Company Profile
ADVCON (listed in July 2017) is an established specialist contractor primarily involved in integrated earthwork and civil engineering services in Malaysia.
Trading Catalyst
We like ADVCON as it has built a reputation in earthworks jobs for blue chip property developers and has successfully diversified into infrastructure segment with two high profile projects i.e. the West Coast Expressway (WCE) and Pan Borneo Sarawak.
Valuation is cheap at 8.6x FY19E P/E (26% lower than its peers), supported by strong RM845m order book and RM1.6bn tender book coupled with more jobs in the pipelines from the potential revival of the shelved mega infrastructure projects such as the Klang Valley Double Track, ECRL and MRT 3.
Technically, the potential rounding bottom formation (with a strong breakout above YTD high/overhead resistance at RM0.46) could spur prices higher towards RM0.50-0.57 territory.
Technical View
Resistance: RM0.460 / RM0.500 / RM0.570
Support: RM0.410 / RM0.400
Cut loss: RM0.380
Key Financial Stats
Trading at 0.96x P/B and 8.6x FY19E P/E (26% lower than its peers)
Source: HLIB