Secures New Maintenance Contract Value of RM125.0mn

TRC has secured a maintenance contract worth RM125.0mn from BHIC Submarine Enginering Services Sdn Bhd, a subsidiary of Boustead Heavy Industries Corporation Bhd. This contract is for the schedule and corrective maintenance of Zone D Area, Jetty Facility Building, Bosun Building, Floating Breakwater Jetty, Shiplift Jetty and Safety Conditioning Facilities at the Royal Malaysian Navy Submarine Base, Sapangar Bay, Kota Kinabalu.

This Job Is Slated for Completion Within 60 Months.

Our View

With the third job TRC secured in 2024, the total YTD new job wins have risen to RM625.3mn. This represents 89.3% of our new job replenishment assumption of RM700mn for the year. We estimate the group’s current total outstanding orderbook to be around RM975.3mn, which translates to 1.4x FY23 revenue.

Assuming a PBT margin of 10%, we anticipate that this project will contribute a net profit of RM9.5mn throughout the construction period.

Forecast

We keep our earnings forecasts unchanged, pending an analyst briefing on 27 June 2024.

Valuation

We keep our target price unchanged at RM0.46 based on a target PER of 12x against CY25 earnings. Maintain Sell on the stock.

Source: TA Research - 26 Jun 2024