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PublicInvest maintains outperform on EA Tech, TP at 73 sen – Business News – The Star Online


KUALA LUMPUR: EA Technique (M) Bhd recently secured two new contracts worth a total of RM94.5mil, which will improve the group’s earnings visibility to up to five years.

PublicInvest research maintained its outperform rating on the counter with target price kept unchanged at 73 sen.

“No change to our earnings forecast as we do not see contribution in FY18, while also assuming this as part of FY19 replenishment. 

“We estimate these projects are expected to yield about 30% margins at the EBITDA level,” it said.

Petronas and Udang Port Sdn Bhd awarded one contract each to EA Technique. The new contracts will involve seven vessels of which five will be utilising the group’s own assets while the other two are charter-in-vessels. 

The term of the contracts is within one to seven years including extension periods.

PublicInvest research estimates that the new contracts boost the group’s outstanding orderbook to about RM900mil, inclusive of additional extensions, which translates to 4X marine operations’ revenue as of FY17.

“We have assumed the additional extension in our forecast as we believe clients will exercise the options given the Group’s good track record and business relationship.

“Furthermore, we understand that the group has submitted various tenders amounting to about RM1bn.”





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