Quick take: Favelle Favco shares up on RM101.4mil contract win

KUALA LUMPUR: Shares in Favelle Favco Bhd rose over 4% in early trade Tuesday after securing orders worth RM101.4mil from six clients operating across the region.

The crane maker added 4.59%, or 10 sen to RM2.28. It is trading at a P/E ratio of 5.87 times.

Favelle Favco said its wholly-owned subsidiaries, Favelle Favco Cranes (M) Sdn Bhd and Favelle Favco Cranes Pty Ltd, have secured the orders since Dec 1, 2020.

It said the six clients are DESB Marine Services Sdn Bhd, Resolution Rigging Services Pty Ltd, PT Megatama Internal, Offshore Oil Engineering Co Ltd, Thai Nippon Steel Engineering & Construction Co Ltd, and Saipem SPA.

The contracts are expected to contribute positively to the earnings and net assets of Favelle Favco for the financial year ending Dec 31, 2021 and beyond, it said.

MIDF Research estimated Favelle Favco’s latest orderbook to amount to about RM492.4mil including the latest purchase order.

“This is after taking into account its last published outstanding orderbook of RM511mas at Nov 25, 2020 and a quarterly burn rate of about RM120mil.

“To date, the majority of the orderbook still consists of oil and gas cranes for the offshore oil and gas exploration and production activities at about 60%. The remainder of 26% is from the shipyard, construction and wind turbine industry,” MIDF said.

The research house is positive on the slew of purchase orders secured by Favcoas we opine that it signals the return in offshore oil and gas activities.

It expects Favelle Favco to be occupied with orders again fairly soon as oil prices are now above US$65 per barrel level.

“We are making no changes to our FY20-21F earnings estimates at this juncture as the purchase order falls within our orderbook replenishment assumption for FY21F of RM370mil,” it said, adding that it has maintained a buy call with a target price of RM3.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3

Favelle Favco


Next In Business News

Bitcoin falls 7% as cryptos stumble over Biden tax plans
Taiwan's chip industry set for years of growth: minister
AirAsia partners RinggitPlus to set up one-stop financial marketplace
CPI up 1.7% to 122.9 in March 2021
Maxis records 1Q net profit of RM334mil, declares 4 sen/share div
Digi posts RM264.8mil earnings in 1Q, declares 3.4 sen dividend
AirAsia Group expects 'clarity' on fundraising in 2-3 months
Pertama Digital keen to apply for digital banking license
KLCI holds firm as glove shares stay bullish
Ether plunges 10% a day after hitting record high

Stories You'll Enjoy