Econpile

Econpile

Postby winston » Sun Sep 28, 2014 6:17 am

September 26, 2014

AmResearch maintains Buy on Econpile

KUALA LUMPUR: AmResearch has maintained its Buy call on Econpile Holdings Bhd with an unchanged fair value of RM1.28/share – pegged to a PE of 15 times FY15F EPS, it said on Friday.

The group announced yesterday that it has secured a RM35.4mil job to undertake substructure works for a serviced apartments project at Lorong Stonor.

The letter of award was awarded by Cipta Klasik (M) Sdn Bhd and comprises earthworks, bored piling, contiguous bored pile and basement substructure works. The duration of the job is 15 months and is expected to commence on 7 Oct.

This is the fourth job that the group has announced since its listing on 30 June. In total, the group has secured RM171mil worth of new jobs for FY15F.
Recall that the group has secure three jobs worth RM135.5mil since its listing.

"The new contract win fortifies our view of Econpile as a leading piling contractor in the market. We expect more new jobs to follow through given its strong tender book of RM2bil," AmResearch said.

Notably, the group is bidding for more building jobs which command higher margins compared to that of infrastructure jobs. Its KVMRT2 job is expected completion next month and will free up 10-12 machines.

"As such, we believe that Econpile will be able to secure more building jobs moving forward. We have a conservative new order book replenishment of RM320mil for FY15F.

"We expect net margins to improve by 1-2ppts per annum as the group focuses on building jobs which yield better margins. Note that as at end-June, 10% of its estimated outstanding order book of RM490mil are infrastructure-related.

"Given its experience in the KVMRT1 project, we expect Econpile to be a frontrunner for piling works in KVMRT2," it noted.

AmResearch also said that Econpile is also in a net cash position and has adopted a 20% payout dividend policy. Econpile is a strong beneficiary of rising jobs flow, with strong execution and concerted efforts to improve margins.

Source: The Star
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Re: Econpile

Postby winston » Wed Mar 27, 2019 9:20 am

not vested

Trading Buy: 5253 - ECONBHD
(Last price: RM0.475, Potential upside +26.3%)

Company Profile
ECONBHD (listed in June 2014) is the largest listed piling specialist providing piling solutions and foundation works, which includes earth retaining systems, earthworks, substructure and basement construction works

Trading Catalyst

We opine that the 54% meltdown in share prices since GE14 has grossly priced in the headwinds currently faced by the construction sector, in wake of a major cutback in infrastructure spending and the reduction in overall margins

We remain positive on ECONBHD due to:
(1) High barrier of entry given the considerable costs of equipment and machinery, as well as the limited availability of experienced operators,
(2) Lower payment risk compared to industry,
(3) Potential revival of certain mega projects, albeit on a smaller scale
(4) Sturdy balance sheet (0.04x net gearing end Dec) provides the Group greater flexibility for project execution/expansion and sustainable dividend payment, and
(5) Attractive risk-reward profile at 9.8x FY20E P/E (30% lower compared to its peers), with strong outstanding order book of ~RM1bn to provide earnings visibility over the next two years and a decent 3.1% yield.

Poised for a downtrend line breakout near RM0.50

Technical View
Resistance: RM0.500 / RM0.570 / RM0.600
Support: RM0.440 / RM0.420
Cut loss: RM0.415

Key Financial Stats
Trading at 9.8x FY20E P/E (30% lower compared to its peers), with strong outstanding order book of ~RM1bn and a decent 3.1% yield.

Source: HLIB
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Re: Econpile

Postby winston » Fri May 03, 2019 9:20 am

not traded

Trading Buy: ECONBHD-5253
(Last price: RM0.625, Potential upside +28.0%)

Company Profile

ECONBHD (listed in June 2014) is the largest listed piling specialist providing piling solutions and foundation works, which includes earth retaining systems, earthworks, substructure and basement construction works.


Trading Catalyst

Following a 22% slump in 7 trading days to RM0.625 from YTD high of RM0.80 (18 Apr), ECONBHD provides an attractive risk-reward profile at 12.3x FY20E P/E (18% lower against peers), supported by superior ROE, coupled with robust order book ~RM1bn (after securing RM620m contracts in 9MFY19).

Overall, ECONBHD remains the market leader in the piling and foundation with its expertise in undertaking complex and larger scale jobs. After a sluggish 1HFY19 (mainly due to the variation orders, cost overrun and impairment of its trade receivables), 2HFY19 and FY20-21 earnings are expected to improve further, backed by solid RM1bn order book and potential more job replenishments as the sector dynamics have turned positive .

Technically, ECONBHD may be due for a downtrend reversal to test RM0.70-0.78 territories after a brief consolidation.

Technical View
Resistance: RM0.650 / RM0.700 / RM0.800
Support: RM0.600 / RM0.575
Cut loss: RM0.560

Key Financial Stats
Trading at 12.3x FY20E P/E (18% below peers), supported by high FY20 ROE of 16.5% (116% higher than peers).

Source: HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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