Pintaras Jaya’s earnings outlook remains positive on Singapore operation – Affin Hwang Capital

Pintaras Jaya’s earnings outlook remains positive on Singapore operations – Affin Hwang Capital

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KUALA LUMPUR (March 12): Affin Hwang Capital Research has reiterated its “buy” call on Pintaras Jaya Bhd at RM2.94 with an unchanged target price of RM4.04 and said the group’s earnings outlook remains positive on the back of steady piling services demand in Singapore and minimal impact from the Covid-19 outbreak.

In a note today, the research house said the roll-out of new infrastructure projects may be further delayed, while the implementation of some property projects may be disrupted due to the recent change in government.

“That said, believe Pintaras Jaya’s earnings outlook over the next 2-3 years remains good as most of its earnings are contributed by its Singapore operation,” the research house said.

Meanwhile, Pintaras Jaya has secured RM443 million of new contracts and its order book stood at circa RM446 million as at February 2020.

The research house also added that its tender book remains high at circa RM3 billion.

“We believe Pintaras’ order book replenishment remains intact as we understand that the group has established a good track record in Singapore on the back of its high-quality work and operational efficiency,” it said.

On capital expenditure, the group has spent close to RM38 million in FY19 mainly for new machinery in Singapore.

“Currently, it has at least 50 rigs, most of which are in Singapore. The group may further expand its fleet in Singapore to cater for the increased piling services demand.

“Its net cash position of 34 sen per share and dividend yield of 6.8% is attractive in our view,” the research house said.

At 10am, Pintaras Jaya shares rose six sen or 2.04% to RM3, valuing the group at RM487.64 million.