Wah Seong's topline to more than double in FY22?

NST Thu, Dec 08, 2022 09:37am - 1 year View Original


KUALA LUMPUR: Wah Seong Corp Bhd's revenue is expected to grow 1.5 times in its financial year 2022 supported by  record high order book, said Public Investment Bank Bid (PublicInvest). 

Wah Seong's subsidiary WS Engineering & Fabrication Pte Ltd has been awarded a contract worth US$127.1 million by Yinson Azalea Production Pte Ltd, for the supply of certain floating production storage and offloading (FPSO) topside modules.

PublicInvest said with this win, Wah Seong's outstanding orderbook was expected to increase by 18.8 per cent and remain healthy at circa RM3.5 billion, translating to 1.5 times of expected FY22 revenue. 

Assuming a 7.0 per cent net profit margin, the firm said this project would contribute around RM19.5 million each year in FY23 and FY24. 

"We maintain our forecasts, nonetheless, having imputed this project as part of our FY22 orderbook replenishment of RM1 billion," it said.

PublicInvest Research expects Wah Seong's earnings recovery this year going into next year to be on track, supported by its healthy orderbook. 

The firm said the company's tenderbook of RM4.5 billion would remain, with significant award possibly the Qatar pipeline project. 

"The pipeline contract consists of two 38-inch pipelines which will have total lengths of about 103 kilometers (km) and 98 km, while a single 32-inch line having a total length of almost 81 km.

"We maintain our Outperform rating for Wah Seong with an unchanged target price of 70 sen based on 12 times price per earning (PER) over FY23 earning per share (EPS)," it added.

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