PETALING JAYA: Shares in Coastal Contracts Bhd, a builder of support vessels for the oil and gas industry, surged to a new high yesterday after HLG Securities raised its target price for the stock.
“Aside from rising global prices of marine support vessels, new orders are highly possible given the current buoyant demand,” it said in a report yesterday. The stock climbed 13 sen to RM1.09 on volume of 8.4 million shares.
The research house sees Coastal Contracts’ net earnings rising to RM42.5mil in the fiscal year ending Dec 31, 2007 (FY07) from an estimated RM28.6mil in FY06. It also projected a net profit of RM54.1mil, or 16.2 sen per share, in FY08.
“Our forecast does not take into account additional orders that Coastal Contracts may secure during the year,” it said.
Last Saturday, a Bizweek report said the company was likely to ink two new contracts worth between RM150mil and RM200mil next month.
The company secured contracts worth a total RM131mil to build six vessels in the last quarter of 2006. The ships are to be delivered over this year and 2008.
“This already accounts for the bulk of its revenue for 2007,” HLG Securities said.
Coastal Contracts is now building 11 barges and tugboats at third party shipyards in China. Sales of such vessels contributearound RM40mil to RM50mil of its annual revenue.
HLG Securities values the stock at RM1.41, or 11 times its projected earnings per share (EPS) of 12.7 sen in FY07.
Shares in KPJ Healthcare Bhd also bucked the general market trend, finishing 12 sen higher at RM2.14 yesterday.
Affin Securities has initiated coverage on the counter with a “buy” call and a target price of RM2.59.
At that target price, the stock is valued at 11 times its estimated EPS of 23.6 sen for the year ending Dec 31. Compared with its regional counterparts, KPJ is traded at a steep discount to the industry average of 21.8 times.
Affin said the 50% discount reflected KPJ’s slower than industry average annual growth rate of 9.7% against 25.6% for rival healthcare operators in the region.
KPJ manages 19 hospitals, of which 15 are in Malaysia, three in Indonesia and one in Bangladesh.