KUALA LUMPUR: PublicInvest Research maintained its neutral call on Hock Seng Lee Bhd with an unchanged target price of RM1.55 on the back of the company earnings result announcement yesterday.
Hock Seng Lee posted a net profit of RM14.1mil, up 43.9% year-on-year, within the research houses's and consensus expectations.
PublicInvest said it expects construction billings to pick up speed in the second half of this year due to projects with a combined contract value of RM2.5bil.
"As reported earlier, we understand that there has been an increase in construction activities and hence believe that subsequent quarters’ financial performance should be stronger.
"Encouragingly, construction revenue was higher by more than 100% YoY and 17% QoQ at RM154.3m, signaling that the remaining quarters should see higher revenue contributions as its on-going jobs enter more active stages," it said.
The research house also noted that the group's Kuching Centralized Waster Water Management System project has started laser-guided tunnel boring works while for its similar project at
Miri, Package 1 is now 18% completed.
Elsewhere, the Group’s Pan Borneo project has achieved 30% completion.
Hock Seng Lee has RM287mil worth of projects ongoing and has launched RM50mil worth of property projects year to date which comprise gated residences at its 200-acre La Promenade mixed development as well as industrial lots at Vista Industrial Park.
"We understand that HSL has plans to launch c.RM150m in FY18," said PublicInvest.
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