KUALA LUMPUR: FAVELLE FAVCO BHD is on a stronger footing this morning after it secured tower crane contract worth RM78.3mil.
The counter, one of the top gainers on Bursa Malaysia, rose 1.83%, or five sen to RM2.70. In the past one year, it has appreciated 16.09%.
Favelle Favco has secured a total of six contracts for the supply of tower cranes, worth a cumulative RM78.3mil.
It said its wholly-owned subsidiaries, Favelle Favco Cranes Pty Ltd, Favelle Favco Cranes (M) Sdn Bhd and Favelle Favco Cranes Pte Ltd, had received the purchase orders from March 2019 up to the date of announcement.
The contracts are expected to be delivered between the second quarter of 2019 and first quarter of 2020.
MIDF Research has maintained a “buy” call on Favelle Favco with an unchanged target price of RM2.89.
“Our target price is based on EPS19 of 36.1sen pegged to a PER19 of 8.0x. The average PER of its Asian regional peer’s is 11x.
“We believe in Favco’s change in orderbook mix by increasing infrastructure-based projects; net cash position and; consistent dividend payout translating into a reasonable dividend yield,” MIDF said.