AZRB may see profit almost double to RM52m this year

KUALA LUMPUR: Ahmad Zaki Resources Bhd (AZRB), whose share price has gained 82 per cent so far this year, could see its net profit nearly double to more than RM50 million before rising to RM68 million next year.

Rakuten Trade research head Kenny Yee has forecast a 73.2 per cent net profit growth to RM52 million in the year ending September 30 2017, up from RM27.2 million last year.

This would be underpinned by its RM2 billion East Klang Valley Expressway contract with a 50year toll concession, said Yee in a report yesterday.

AZRB recently announced stronger first-half results, which saw its net profit jump 155.1 per cent to RM15.8 million from RM6.2 million previously.

Yee said since its initial report on the company on May 19, AZRB’s financial results had improved, with the first-quarter net profit rising 45.7 per cent.

It has secured RM221.9 million substructure works for the Bukit Bintang City Centre project, bringing its total order book to RM3.7 billion.

“AZRB’s first private finance initiative project under the build, lease, maintain and transfer model of International Islamic University Malaysia Medical Centre in Pahang, provides steady recurring income from maintenance work. Its plantation division is set for a turnaround whereby we believe losses will be significantly reduced in financial year 2017 with the commissioning of palm oil mill,” Yee noted.

He said Rakuten Trade continued to like AZRB for its attractive valuation at only nine times financial year 2018 price earnings ratio (PER) and its growing order book.

The firm upgraded its target price to RM1.66 based on 13 times PER of financial year 2018 based on small mid-cap average.

AZRB closed unchanged at RM1.16 per cent with a thin volume of 360,600 shares yesterday.