Yongnam

Yongnam: 1Q13 results largely within expectation. Revenue grew 22% yoy, with the ongoing execution of its orderbook. Net profit however was flat yoy at $11.5m, as 1Q12 benefitted from exceptionally high gross margins of 29%. Nevertheless, gross margins for 1Q13 still showed sequential improvement to 24% from 20.5%. Margins should pick up slightly over the rest of the year on execution of the strutting orderbook and commencement of new contract wins. Notable ongoing projects for the rest of the yr include Marina Coastal Expressway, Singapore Sports Hub, and HK MTR. Orderbook stands at $324m, with no ytd orders yet. Nevertheless mgt is optimistic of wrapping up several major project bids in 2H13. Maybank KE reiterates Buy with TP $0.43 (from $0.45), pegged to 10x FY13e P/E, with 81% of FY13 revenue backed by orderbook schedule. Believes the company is a good proxy to benefit from the unprecedented infrastructure boom in the region.