KUALA LUMPUR (June 28): Kenanga IB Research has urged investors to subscribe to Main Market-bound Advancecon Holdings Bhd with a target price of 85 sen.

In a note today, Kenanga Research said Advancecon, which has an initial public offering price of 63 sen, will be raising RM56.7 million with a market capitalisation of RM253 million. Advancecon is tentatively scheduled to be listed on July 10.

It said the company's current outstanding order book is at healthy level of RM572 million, providing visibility for the next two years.

"We expect more contract wins from the infrastructure space as Advancecon is targeting larger contracts of above RM50 million and mobilising more machineries into East Malaysia to tap opportunities there starting with the Pan Borneo project.

"We believe that Advancecon, which specialises in earthworks, is less affected by the slowdown in the property development space as it could still actively bid within the infrastructure space with clearer replenishment visibility with impending jobs such as HSR, ECRL, SUKE, DASH and Pan Borneo.

"Subscribe with a target price of 85 sen based on 10x FY18 PER," it said.