Boustead: Kim Eng initiates coverage with Buy Call and $1.39 TP, based on SOTP valuations. Note that grp has been quietly delivering, reporting record profits year after year from FY Mar03 to FY Mar09, with sustained double-digit growth rate. Expect FY Mar11 to be another record-breaking year, driven by the strong orderbook momentum from previous years….
Add that multiple growth opportunities exist for Boustead’s varied businesses, tipping a round of capital investment cycle in the O&G industry to benefit its Energy-related Engineering division. The Real Estate Solutions division should also see a pickup in orders, while new investment opportunities have arisen after the Bio-Treat and TT International deals failed to materialise….
Since acquiring the water and wastewater engineering business in 2002, grp has striven to turn it around and the division finally posted its maiden full-year profit in FY Mar10. Sees continued profitability with the advent of higher-quality projects and expect grp to take the business up a notch…
We note that grp currently has net cash of $183.9m, attractive dividend yield of 4.5% and multiple growth opportunities.
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