(Nov 14, RM0.96)

Maintain “buy” with a target price of RM1.28: Econpile Holdings has secured a RM30 million job to undertake bored piling, earthworks and basement substructure works at a condominium project in Persiaran Stonor, Kuala Lumpur.

The contract was awarded to its wholly-owned subsidiary Econpile (M) Sdn Bhd by CRCC Malaysia Bhd.

The job is expected to take 14 months with completion in January 2016. This is the fifth major job that the group has secured in this fiscal year and since its listing on June 30 June, 2014.

The group has secured RM200.9 million worth of new jobs in financial year 2015 forecast (FY15F) thus far. Last year, the group secured RM522.6 million worth of new jobs. Given our conservative new job assumption of RM320 million for FY15F, there could be a further upside as the group secures more jobs in the coming months.

Recall that Econpile had secured a piling job in Lorong Stonor, Kuala Lumpur worth RM35.4 million in September.

The group is expected to announce its first quarter of FY14 (1QFY14) results on Nov 28 — the same day as its annual general meeting.

We expect the results to be similar to the previous quarters as the Klang Valley Mass Rapid Transit (KVMRT) jobs are still in the midst of completion. We expect margins to improve further in the coming quarters, as the group will be able to redeploy its machineries for more property jobs (which command higher margins compared to that of infrastructure jobs). The KVMRT jobs are scheduled for completion this month.

Maintain “buy” as Econpile will benefit from more property jobs, which require piling services, moving forward. — AmResearch Sdn Bhd, Nov 14

This article first appeared in The Edge Financial Daily, on November 17, 2014.