MGB has bagged a high-rise construction job from its parent company, LBS Bina Group for RM167.8m. The contract’s scope of work includes the construction of 36-storey service apartments with facilities floor, parking space and basement parking. This new job is expected to contribute c. 5-6% per annum on average to the Group’s earnings during the contracted period of 27 months, assuming a high single digit margins. Works are expected to begin in 1QFY24 and complete by 4QFY26. To-date, the Group has successfully replenished its orderbook by RM371.4m, marking 74.3% of our FY23 job replenishment target of RM500m. While we have anticipated 1-2 job wins by late-FY23, the Group has replenished 56% out of our expectation of RM300m new wins so far. Nonetheless, we maintain our earnings forecast as this makes up a part of our FY23 orderbook replenishment assumption of RM500m. We retain our Outperform call with an unchanged SOTP-based TP of RM1.16, pegged at 11x PER.
Source: PublicInvest Research - 15 Dec 2023
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