OKP: Annouced that is has secured a $28.5m contract to undertake the widening of Old Choa Chu Kang Road from Sungei Tengah Road to Lim Chu Kang Road. Work is scheduled to commence on 14Feb11 and is targeted to be completed by 13Feb14. Management noted that OKP netted a total of 7 construction projects last yr, of which 6 were public sector contracts. Contract win further fortifies OKP’s position as a leading service provider in public sector civil engineering and construction works…..
We note that grp currently has a strong financial position, with an orderbook of approximately $327.6m, vs annualized FY10 Rev of $147.1m, underpinning earnings visibility all the way till 2013, while balance sheet remains strong with a net cash position of $0.22/share….
At current price, grp trades at an annualized 9.7x FY10E PE vs peers average of 8.4x, however ex cash, grp will trade at just 6.2x, suggesting further upside for stock. DBSV has Buy rating on stock with $0.70 TP based on 7x FY11 PE + sum of Net cash surplus.
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