Econpile unlikely to meet new job wins target for FY20 — Analysts

KUCHING: Econpile Holdings Bhd (Econpile) is not likely to meet its target for new job wins of RM600 million in financial year 2020 forecast (FY20F), resulting in analysts cutting their FY20 to FY22F assumptions for jobs wins RM300 million annually.

AmInvestment Bank Bhd (AmInvestment Bank) recapped that year to date (YTD), Econpile has only secured new jobs worth RM156.9 million while the group’s outstanding order book stands at RM700 million.

“Econpile has set itself a target for new job wins of RM600 million in FY20F, versus RM643.7 million achieved in FY19,” the research firm said.

“With only one more month to go before the end of FY20F, this has become a tall order.

“We therefore cut our FY2022F assumption for job wins to RM300 million annually, from RM500 million.”

Given the still elevated national debt and the still depressed oil prices (that will hurt petroleum revenues), AmInvestment Bank believed the government has very limited room for fiscal manoeuvre.

The research firm noted that this means that it is unlikely to roll out new public infrastructure projects in a major way over the short term, such as the MRT3 and the KL-Singapore high-speed rail.

“On a brighter note, Econpile has been pre-qualified to participate in the East Coast Rail Link (ECRL) project.

“The main contractor of the 640 kilometre (km) rail project recently started to dish out subcontracting jobs to local players.”

Meanwhile, AmInvestment Bank was also mindful of the acute oversupply situation in the high-rise residential, retail mall and office segments, which translates to weak prospects in property-related job wins for piling contractors like Econpile.