KUALA LUMPUR: AmInvestment Bank research has initiated coverage on Crest Builder Holdings with a buy recommendation and a fair value of RM1.83.

"The stock is currently trading at an undemanding forward PER of 4.6x–6.4x for FY20–FY22. This offers a potential upside of more than 100% and a dividend yield of 4.5%," it said.

In a note, the research house said it forecasts core net earnings of RM20mil, RM21.8mil and RM28.1mil for FY20 to FY22.

According to the AmInvestment, Crest Builder's medium-term outlook is positive, anchored by several construction wins in the past few months while the upcoming launches will be one of its major earnings contributors beyond FY21.

It added that the group has stable income from a concession arrangement while it believes the value of its investment properties deserve more atention.

To recap, Crest Builder secured several construction contracts worth more than RM500mil in the past 12 months.

Its remaining order book stands at RM1.24bil, which indicates stable income for the next two to three years, said AmInvestment.

In the property segment, the group is planning a mixed-use commercial development named Latitud8, which is a joint venture with Prasarana Malaysia. The project has a GDV of about RM1.1bil and is scheduled for launch in 2H2020.

It has also planned another mixed-used development in Kelana Jaya with a GDV of about Rm1bil, targeted to be launched in 2021.

The group has also plans to build residential apartments worth about RM450mil in GDV with a scheduled launch in 1QFY21.

Crest Builder owns two investment properies in Seksyen 19, PJ, and Kelana Jaya, which receive RM8mil and RM9mil of annual rental respectively.

It also manages a concession, of which it has a 51% stake, of the 5,000 student capacity UiTM Tapah 2 campus with the Ministry of Education and Universiti Teknologi Mara.