PETALING JAYA: Wah Seong Corp Bhd
(Wasco) remains a “buy” with analysts due to the RM558mil contract clinched on Wednesday as it will provide earnings visibility and growth into financial year 2023 (FY23).
The floating production, storage and offloading (FPSO) topside modules related contract award by Yinson Azalea Production Pte Ltd, a unit of Yinson Holdings Bhd, takes Wasco’s existing order book value to RM3.5bil. Works on the project are scheduled to be completed within 24 months.
“Assuming a rough 10% net margin for the job (engineering and fabrication jobs typically fall within this range) implies an average net earnings impact per year of roughly RM27mil,” Kenanga Research noted in a report on the oil and gas support services company.
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