KUALA LUMPUR: Better progress on existing jobs in KITA@Cybersouth and Idaman projects is expected to drive MGB Holdings Bhd's financial year 2024 (FY24) earnings growth.
RHB research said it expects MGB's fourth quarter (Q4) 2023 core earnings to grow year on year (YoY) to RM10-12 million amidst higher progress billings from jobs particularly coupled with conducive labour conditions, and manageable raw material prices.
"As such, FY23 earnings could triple YoY to circa RM47 million from RM15 million in FY22," it said in a note.
Separately, MGB announced its first pre- cast order from Saudi Arabia worth SAR94.5 million (RM119.5 million) via a contract between SANY Alameriah Industrials (SA) and SALD Industrial Company.
RHB research believes that the total volume of precast concrete products supplied for this project could reach 300,000 cu m (vs minimum of 270k cu m) over the three-year period agreed.
It said this will be underpinned by the robust demand for housing in the country (particularly under the Sakani housing programme, which offers affordable options).
"As such, the potential value attributable to MGB is about RM375 million. "From this, we expect to see earnings accretion of RM23.6 million over the three year period, with a 7 per cent profit after tax (PAT) margin assumed," it said.
RHB research has maintained its earnings estimates as the latest pre-castorderis within its order replenishment target of 90,000 cu m for FY24.
"We maintain Buy on MGB with a target price of RM1.13," it added.
