PETALING JAYA: RHB Research remains upbeat on ML Global Bhd, largely underpinned by its strong order book replenishment potential and exposure to the industrialised building system (IBS) manufacturing techniques.
The research house has also raised its earnings forecasts on the construction firm moving forward, given the promising outlook of the company.
ML Global recently clinched a RM149mil contract via its wholly-owned subsidiary MITC Engineering Sdn Bhd. The contract, which was awarded by Casa Inspirasi Sdn Bhd (CISB), is related to a proposed mixed development project in Cameron Highlands.
The project, which is scheduled to commence this month, is slated for completion in October 2020.
CISB is a subsidiary of LBS BINA GROUP BHD, which is ML Global’s major shareholder with a 51.4% stake.
“We are positive on the latest contract win, as it brought year-to-date FY17 orderbook wins to RM1.45bil. This is close to our initial FY17 orderbook win assumption of RM1.5bil.
“Assuming pre-tax profit margin of 8%, it should generate a pre-tax profit of RM11mil to RM12mil for ML Global in the next three years.
“The total outstanding order book balance after adding in the latest win stands at RM2.12bil.
“This should provide steady earnings visibility over the next two to three years,” said the research unit in a note.
Following the latest win, RHB Research raised its new order book replenishment targets to RM1.6bil, RM1.3bil and RM1.3bil in FY17-19 respectively. The improved expectation was largely on the back LBS Bina’s robust property sales and ML Global’s initiatives to secure external jobs in the affordable housing space.
The research house has also raised its net profit forecasts for ML Global for FY17-19 by 3%, 8% and 13% respectively, underpinned by its positive prospects.
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?