KUALA LUMPUR: Wah Seong Corp Bhd is expected to experience a bumper financial year ending December 31, 2022 (FY22) and FY23 with the recent line pipe thermal insulation East African Crude Oil Pipeline (EACOP) project worth RM1.1 billion, Hong Leong Investment Bank Bhd (HLIB) said.

The firm said this was the company's single largest job win since Nord Stream 2 in 2016. 

"Wah Seong's current order book stands at RM3.0 billion as at end-Q1 2022 while tenderbook stands at RM4.0 billion (mostly in Middle East and Australia). 

"We are excited about the group's near to mid-term prospects," HLIB said in a note today.

The company turned into the black in the first quarter (Q1) ended March 31, 2022 with a core net profit of RM4.7 million.

HLIB said the results came within its expectations at eight per cent and consensus full-year forecasts as it expected subsequent quarters to be better for Wah Seong with further revenue and profit recognition from its EACOP and Qatar projects. 

Wah Seong's profits almost doubled year-on-year to RM4.7 million versus profits of RM2.4 million in Q1 FY21 due to better revenues and profit margins from all of its business segments. 

"We make no changes to our FY22-FY23 earnings estimates," it added.

HLIB has maintained its "Buy" call on Wah Seong, with an unchanged target price of RM1.17 to reflect the positive job win prospects and earnings turnaround over the next 12-18 months.