KUALA LUMPUR: Affin Hwang Investment Bank Bhd has maintained a Buy call for Pintaras Jaya Bhd with an unchanged target price (TP) of RM4.04 per share.
In a research note, the bank said it believed the construction group’s Singapore operation would continue to support earnings in the medium term.
The leading piling and foundation specialist spent close to RM38 mil in capital expenditure in the financial year ended June 30, 2019, mainly for new machinery in Singapore.
Currently it has at least 50 rigs, most of which are in Singapore.
The group may further expand its fleet in Singapore to cater for the increased piling services demand.
Besides, Affin Hwang also noted the group’s net cash position of 34 sen per share and dividend yield of 6.8% were appealing.
“We believe Pintaras’ earnings outlook remains positive in the medium term, while the domestic property and construction outlook appears gloomy, the construction demand in Singapore remains healthy.
“Given the group’s operational efficiency and good track record, we believe it is able to benefit from the improved construction demand in Singapore,” it said.
The bank said the recent coronavirus outbreak may lead to tighter safety regulations, but the impact is minimal at present.
At 3.50 pm, Pintaras’ share price fell 41 sen to RM3.50 with 60,700 shares transacted. – March 12, 2020 Bernama
