KUALA LUMPUR (Oct 15): CB Industrial Product Holding Bhd (CBIPH) shares rose 0.45%  following announcement its unit Modipalm Engineering Sdn Bhd had signed deals worth RM105.5 million for the construction of palm oil mills.

At 11am, CBIP rose two sen to RM4.50 with 127,500 shares traded. The stock changed hands at RM4.55 at 12.11pm.

For comparison, the KLCI rose 0.1%.

Yesterday, CBIP said Modipalm had signed contracts with Prosper Group subsidiaries for the palm oil mill projects.

Prosper Group subsidiaries are Papua New Guinea-based Vavnimo Green Palm Oil Mill Ltd and Malaysia-based Merchong Palm Oil Mill Sdn Bhd. The contracts for Vavnimo and Merchong are valued at RM 57 million and RM 48.5 million respectively.

The contracts are expected to contribute positively to CBIP's financial years (FY13) ending December 31, 2015 and 2016, according to the company.

Hong Leong Investment Bank Bhd analyst Chye Wen Fei wrote in a note today CBIP's latest contracts would raise unbilled sales for its palm oil mill engineering division by 25.4% to RM521.1 million.

Chye said the figure was equivalent to 1.6x of the division’s FY revenue. The analyst has maintained Hong Leong's earnings forecast for CBIP.

Hong Leong has also retained its target price of RM4.54 for CBIP shares and "hold" recommendation on the stock