KUALA LUMPUR (July 25): Shares in ACE Market-listed GDB Holdings Bhd jumped as much as 8.9% to 43 sen this morning, after TA Securities initiated coverage on the construction services firm with a “Buy” rating.

At 11.20 am, the stock was trading three sen or 7.6% higher at 42.5 sen, with a total of 7.49 million shares done, valuing it at a market capitalisation of RM246.88 million.

GDB was listed on the ACE Market of Bursa Malaysia Securities on March 27 with an issue price of 35 sen, and has since been trading in the range between 27.5 sen and 40 sen.

In a note today, TA Securities said it has initiated coverage on GDB with a “buy” rating and a target price of 52 sen, derived from a 10 times price-earnings multiple for the calendar year 2019. 

“This represents a potential total return of 35.1%, including a 3.8% estimated dividend yield,” the research house said.

TA Securities noted that the small-cap company is in a net cash position of RM80.4 million or 12.9 sen per share as of end-March, has strong technical capabilities including the adoption of Building Information Modelling, and a proven track record in terms of quality and early project completion.

The research house forecast GDB’s net earnings to grow by 23.7% and 11.8% for the financial year ending December 2018 (FY18) and FY19 respectively, before retreating by 1.6% in FY20.