Ahmad Zaki a ‘buy’ on attractive valuations, jobs in hand
PETALING JAYA: Rakuten Trade has raised the target price for Ahmad Zaki Resources Bhd (AZRB) to RM1.66 on attractive valuations of 9 times price to earnings ratio for financial year 2018 and a growing order book, with a potential turnaround in their plantation business. It has a “buy” call on the stock.
The research firm said AZRB’s results have improved since its initial report in May. Its net profit for the six-month period has more than doubled and it has managed to secure a RM221.9 million substructure job for the iconic Bukit Bintang City Centre, which will keep AZRB busy with earnings visibility for the next four and five years.
Its first private finance initiative project under the built, lease and maintain transfer model for International Islamic University Malaysia in Pahang costing RM413 million is also providing steady recurring income from maintenance which has boosted its revenue and profit income from property for the last two quarters.
Rakuten also expects losses in its plantations segment to significantly be reduced in the current financial year with the commissioning of a palm oil mill which will improve cost and efficiency.
Rakuten Trade expects an earnings growth of 73.2% for the current financial year and 30.8% growth for financial year 2018 underpinned by the East Klang Valley Expressway job worth RM2 billion and a 50-year toll concession.