HSS Engineers order book at RM1.5bil


“For HSS, key projects to look out for in the next six-to-nine months include Pan Borneo Highway Sabah phase 2, the PJD Link Highway, KL Northern Dispersal Highway and Johor LRT,” it said.

PETALING JAYA: HSS Engineers Bhd’s job flow outlook remains healthy, following the group’s recent Mass Rapid Transit 3 (MRT 3) project management consultant award that has doubled its order book to an all-time high of RM1.5bil.

Last week, HSS Engineers announced that a joint-venture between HSS Integrated Sdn Bhd and HSS Engineering Sdn Bhd had been appointed as the management consultancy services provider for the MRT3 Circle Line project valued at RM997.9mil.

With HSS Engineers’ order book hitting an all-time high, CGS-CIMB Research has raised its earnings per share (EPS) for the company by 24% to 26% for the financial years ending Dec 31, 2023 (FY23) and FY24, based on conservative MRT 3 assumptions.

“We prudently assume 10% of total contract value would flow through in FY23 and FY24.”

The research house emphasised that this is due to the likely gradual deployment of engineers over the next one to two years, to accommodate for the time required to fully award all civil works packages before works commence.

“Hence, we raise our FY23-FY24 forecast EPS by 24% to 26% to account for the MRT 3 job’s contribution,” it said.

Based on CGS-CIMB Research’s industry checks, it sees new sizeable engineering and project management services opportunities emerging for the group, with focus on new highways in the Klang Valley, rail projects in Johor and water and rail projects in Sarawak.

“For HSS, key projects to look out for in the next six-to-nine months include Pan Borneo Highway Sabah phase 2, the PJD Link Highway, KL Northern Dispersal Highway and Johor LRT,” it said.

CGS-CIMB Research has raised HSS Engineers target price by 24% to RM0.85 for 2022, based on a 24-times price-to-earnings (PE) ratio in line with average PE of global peers.

CGS-CIMB Research is keeping an “add” call on HSS Engineers as the group remains a small-cap laggard and one of the main beneficiaries of the MRT 3.

“In our view, positives from the MRT 3 project management consultant award and healthy order visibility are not fully reflected in the share price,” it said.

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