Monday, October 23, 2017

FW: AmBank Research - Protasco : Extending beyond road maintenance BUY, 23 Oct 2017




Protasco : Extending beyond road maintenance                                                                BUY


We initiate coverage of Protasco with a BUY call and an SOP-based fair value of RM1.33. Founded more than two decades ago, Protasco specialises in the maintenance of federal, state and rural roads in Malaysia. It is also engaged in construction, property development, engineering and consultancy, education, and trading/manufacturing of building materials and products.


Protasco is the largest of the three federal road maintenance concessionaires in Peninsular Malaysia. Via 51%-owned Roadcare (M) Sdn Bhd (Roadcare), it controls the central and eastern regions covering Selangor, Pahang, Terengganu and Kelantan, while its peers, private companies Belati Wangsa (M) Sdn Bhd and Selia Senggara Sdn Bhd are in charge of the northern region (Perlis, Kedah, Penang and Perak) and the southern region (Negeri Sembilan, Melaka and Johor) respectively. Based on our estimates, Roadcare has a 49% market share in terms of total annual billings of Peninsular Malaysia’s federal road maintenance concessionaires.


We project its FY18/19 earnings to grow by 24%/8% underpinned by: 1) strong outstanding road maintenance concession order book of RM4.2bil; 2) strong earnings visibility over the long term from the road maintenance concession which will last till FY2026; and 3) potentially new affordable housing projects.



Others :

Oil & Gas Sector : Impending equilibrium on lower US rig count?                                NEUTRAL

Plantation Sector : No excitement yet                                                                                    NEUTRAL





Plantation Sector : News flow for week 16 – 20 October                                                NEUTRAL            




Malaysia : Negative real returns for 9th straight month




Takeovers & Mergers : MGOs in question

Hartalega : Higher capacity boost

Transportation & Logistics : ‘PSC should also be based on airport type’

Nationwide Express : Sees Airpak buy as growth catalyst





The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.





















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