KUALA LUMPUR (Jan 18): Hong Leong IB Research has initiated coverage on Taliworks Corporation Bhd with a “Buy” rating and target price of RM1.85 and said Taliworks stands a high chance to recoup RM471 million receivables from SPLASH post water restructuring by Selangor government.

In a note today, the research house said this will provide a strong boost to its cash pile (27% of market capitalisation).

“Newly acquired business (waste management) is expected to grow by double-digit mainly driven by tariff hike and efficiency gain.

“Strong partnership with EPF enables Taliworks to acquire assets with lower cost of capital.

“Initiate with Buy, SOP-driven target price: RM1.85 (28% upside). Offers long-term recurring income and potential cash inflow from settlement of trade receivable,” it said.