not vested
4Q Results
Revenue: +75% RM 795m
Losses: RM 48m
Net Asset: RM 0.75
https://www.bursamalaysia.com/market_in ... id=3330492
Affin Hwang Capital said Wah Seong had seen strong activities pick up in both its pipe
coating and engineering segments driven by improvement in global oil and gas (O&G)
capital spending on the back of higher oil prices.
Wah Seong recently won a RM1.1 billion contract for line pipe thermal insulation services
for the Qatar and East African Crude Oil (EACOP) project and a RM0.6 billion engineering
procurement and construction (EPC) contract to fabricate Yinson's FPSO Agogo topside
module.
"These series of new contract awards have resulted in a healthy outstanding order book
of RM3.2 billion (close to 2017 historical high of RM3.6 billion), providing earnings visibility
until 2024," it said.
Wah Seong also recently expanded its fabrication capacity by 1.5 times with an upgraded
loadout capability by acquiring another Batam yard, allowing it to take on more jobs.
Affin Hwnag said the company aimed to replenish RM2 billion of contracts in 2023 from
its current RM4 billion tender book.
"Wah Seong's key growth in the coming years will surround Africa (EACOP project) and
more Qatar contract potential wins," it said.
Affin Hwang said there was a lack of comparable peers both locally and globally, with
Shawcor (listed on the Toronto Stock Exchange) being the only other pipe coater.
Wah Seong's foreign shareholding is around the 15-17 per cent level.
"Based on Bloomberg consensus, its 2023-2024 profit is projected to grow by 44 per
cent/11 per cent.
"Based on these street 2023 estimates, Wah Seong is trading at a forward 7.6 times price
per earning (PE) multiple, a discount to the local small-mid cap O&G space valuation of
10-12 times," said Affin Hwang, which did not rate the stock.
Wah Seong, which is 40%-controlled by the Tan family of Tan & Tan Developments and IGB Corp, reported a narrower net loss of RM6.3 million for the financial year ended Dec 31, 2022 (FY2022), down 94% from RM107.48 million in FY2021 thanks to stronger order book.
The group’s revenue grew 88% to RM2.69 billion in FY2022 from RM1.43 billion in FY2021.
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