Friday 29 Mar 2024
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KUALA LUMPUR (June 19): JF Apex Securities Berhad has  initiated coverage on AME Elite Consortium Bhd (AME) at RM1.69 with a “Buy” rating call and target price of RM2.14.

In a note today, the research house said it opined that this under-researched company deserves to be re-rated in view of its: 1) bright outlook to benefit from prolonged trade war; 2) serving a niche market with high entry barrier; 3) sustainable business model; 4) established development blueprint; and 5) well-managed balance sheet.

JF Apex Securities is projecting a 3-year CAGR growth of 24% for AME’s top line from FY2020-FY2022.

It said the growth is underpinned by its outstanding order book amounting to RM348.5 million in the construction and engineering division, as well as the total estimated undeveloped gross development value of more than RM1.5 billion in its property division.

“Likewise, profit after tax and minorities interest (PATAMI) is set to grow at 3-year CAGR of 26.4%,” it said.

“We forecast gross dividend per share of 3.25 sen /share and 4.28 sen / share for FY2021F and FY2022F respectively, assuming a dividend payout ratio of at least 20% of its net profit.

“This will translate into a gross dividend yield of 1.92% and 2.54% respectively,” it said.

 

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