Assuming a profit before tax margin of 14%, the project is expected to contribute about RM2.2 million to Kerjaya’s bottom line per annum. Recently, Kumpulan Wang Persaraan (Diperbadankan) [KWAP] injected RM776 million into E&O’s Seri Tanjung Pinang (STP) Phase 2A for a 20% stake. We believe this collaboration between E&O and KWAP to jointly develop the STP Phase 2A project in Penang would expedite the award process, and is poised to benefit Kerjaya given that E&O has been a long recurring client of Kerjaya. In addition, we note that Kerjaya is already on-site executing channel dredging works for STP Phase 2 (awarded back in March 21, 2016), which is part of STP 2 reclamation works. Hence, we are optimistic about Kerjaya’s ability to secure more packages for the STP 2 development in FY17E.

Source: The Edge Markets April 04, 2017 01:52 UTC