31st December, 2014
KUALA LUMPUR: Affin Hwang Research has maintained its BUy call on Benalec with a target price of 74 sen based on 10 times FY15 EPS.
In a note on Wednesday, the research house said securing approvals to commence works on the Tanjung Piai reclamation concession will be extremely good news for BHB, whichis attractively valued at current price.
“We estimate that this concession will generate around RM10bil in billings and RM1bil in net profit over 10-15 years, hence significantly enhancing the valuation of BHB,” it said.
It said study on 1,760 acre Pengerang reclamation concession is still on-going.
It said net margin for the group ranged from14.0% to 53.3% in FY09-13, and had dipped to 3.4% in FY14 (due to lesser work recognition, reversal of profit on a rescinded land, impairment losses and profits from land sale to be booked only in FY15) before recovering to 25.1% in 1QFY15.
“Based on a selling price of RM50 psf and net profit margin of 10%, we forecast a total revenue and net profit of RM3.8bil and RM383mil from the Pengerang concession,” it said.