CBIP eyes up to RM500m worth of palm oil mill jobs, double-digit revenue growth this year

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SHAH ALAM (May 28): CB Industrial Product Holding Bhd (CBIP) is expected to secure up to RM500 million worth of contracts for its palm oil engineering business, giving it a double-digit growth in revenue this year.

Its managing director Lim Chai Beng said the group is currently bidding for 10 palm oil mill projects worth some RM10 million to RM70 million each.

"Most of the projects are located overseas, from Indonesia to Papua New Guinea... Around two to three projects are from local companies," he told reporters after CBIP's annual general meeting today.

"Our succession rate [in securing contracts] is high at around 70%," he added.

Year-to-date, CBIP has secured four palm oil mill contracts worth RM250 million, said Lim.

"There will be more contracts in the next two to three months," he added.

The current outstanding orderbook for the palm oil engineering division is RM420 million, which will last the group one-and-a-half years.

Meanwhile, its orderbook for special purpose vehicles is at RM200 million.

For the financial year ended Dec 31, 2014 (FY14), the contribution from palm oil engineering business to its revenue was 70% to 75% while the remaining came from the special purpose vehicle division.

CBIP (fundamental: 2.7; valuation: 1.8) posted a net profit of RM91.2 million in FY14, down 7.91% from RM98.42 milion. Revenue was up 1.74% to RM600.89 million in FY14 from RM590.44 million in FY13.

As at 3.44pm, the stock was traded down 0.49 % at RM2.02, with a market capitalisation of RM1.08 billion.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)