KUALA LUMPUR: Shares in UEM EDGENTA BHD rose 2.8% in early trade Friday after the company secured hospital contracts worth RM540mil from Singapore Government.
The counter, one of the top gainers on Bursa Malaysia, gained 2.81%, or eight sen to RM2.93.
UEM Edgenta has secured contracts for the provision of hospital support services to the Ministry of Health, Singapore, worth up to RM540.06mil.
UEM Edgenta said its indirect 97.46% subsidiary UEMS Solutions Pte Ltd accepted the contracts for the provision of hospital support services to the restructured hospitals in Singapore, which include housekeeping and portering services.
The total value of the contracts is estimated to be between RM429.96mil to RM540.06mil, with the final value dependent on the actual manpower resources deployed, it said.
MIDF Research said the new contract could translate to a range of about RM86mil to RM180mil worth of annual revenue for the company depending on the final value and duration of the contract
“With the new contract secured, the earnings visibility for the HSS segment in Singapore has improved. This is due to the longer duration of the new contract of between three to five years as opposed to one to three years previously,” it said.
“While we are positive on the new contract win, we are making no changes to our FY19-20F earnings estimates at this juncture as we await for further clarity on the exact contract value and duration of the contract in the upcoming analyst briefing,” MIDF said.
The research house reiterated its ‘buy’ recommendation on UEM Edgenta with an unchanged SOP-based target price of RM3.28 per share.
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