STOCK FOCUS OF THE DAY
Ikhmas Jaya: Lands two jobs including hospital in Kajang BUY
We cut FY18-20F net profit forecasts by 34%, 14% and 13% respectively, reduce our FV by 14% to RM0.61 (from RM0.71), but maintain our BUY call. The earnings downgrade is largely to reflect weaker margins from older jobs. Our FV is based on 13x revised FY19F EPS of 4.7 sen, at a slight premium to our 1-year forward target PE of 10-12x for small-cap construction stocks, to reflect a relatively less competitive piling segment vis-à-vis general contracting.
Ikhmas has been awarded two contracts worth a total of RM257.7mil comprising: (1) design and build for the Kajang Hospital (RM199mil) by Naluri Rezeki Sdn Bhd; and (2) demolition of existing buildings, followed by substructure works on Lot 155, Jalan Ampang (RM58.7mil) by Putrajaya Ventures Sdn Bhd. The latest contracts have boosted Ikhmas’ YTD job wins to RM296.2mil, and its outstanding order book to RM890mil. We are keeping our order book replenishment assumption of RM500mil annually in FY18-20F.
QUICK TAKE
Felda Global: Hit with a RM23.4mil legal suit HOLD
RETAIL RESEARCH
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