Chin Hin’s contract win ‘very welcomed and significant one’

KUCHING: Chin Hin Group Bhd’s (Chin Hin) contract win for the construction of an integrated workers complex has been viewed by analysts as a “very much welcomed and a significant one.”

In a filing on Bursa Malaysia, Chin Hin’s board of directors announced that indirect whollyowned subsidiary Metex Modular Sdn Bhd (Metex Modular) had accepted a letter of award from Saujana Vision Sdn Bhd for the construction of an integrated workers complex with comprehensive facilities in Pengerang, Johor.

The contract sum of the project amounts to RM238.3 million and is only for a contract period of 12 months, commencing from January 1, 2018.

“Given the recent temporary setback in its wire mesh division, this development is certainly a very much welcomed and a significant one in its evolution toward being a solutions provider from its current core strength as an integrated distributor and manufacturer of building materials,” the research arm of Public Investment Bank Bhd (PublicInvest Research) said.

PublicInvest Research gathered pretax margins are about 20 per cent, though the research arm took a conservative stance in assuming 10 per cent given that this is the group’s maiden foray.

According to the research arm, financial year 2018 (FY18) earnings per share (EPS) should increase by two sen, up 19.2 per cent, resulting in a raised target price of RM1.67 per share from RM1.40 per share previously.

All in, PublicInvest Research continued to like Chin Hin’s growth prospects and affirmed its ‘outperform’ call, remaining assured of the group’s strong growth prospects 2018 and beyond,

The research arm noted that this was underpinned by contributions from Chin Hin’s capacity expansions in the autoclaved concrete and precast concrete businesses, growing contributions from recent earnings-accretive acquisitions and high chances of securing of more contracts by Metex Modular.