KUALA LUMPUR: AmResearch is maintaining its Buy call on PLUS Expressways with an unchanged fair value of RM4 per share.
It said on Wednesday, July 7 that at RM4, the share price is pegged to a 15% discount to its DCF value (WACC: 7.5%). This is well supported by strong free cash flow generation and alluring FY10F-12F yields of 5%- 7%.
'Key re-rating catalyst for the stock would include: (i) Stronger-than-expected traffic growth trajectory in 2H 2010; (2) Scheduled tariff hike in 2011F; and (3) Potentially value-accretive investments abroad,' it said.
PLUS EXPRESSWAYS BHD [] (PLUS) announced that Ministry of Works has approved its unit Projek Lebuhraya Utara-Selatan Bhd's (PLUS) request to undertake CONSTRUCTION [] of a fourth lane along certain stretches of its expressways.
The expressways concerned are the North-South Expressway (NSE) and New Klang Valley Expressway (NKVE). The expansion of an additional lane is for certain stretches along both expressways. This would include Shah Alam to Rawang, Shah Alam to Jalan Duta and a section from Nilai (North) to Seremban.
Estimated cost of the project is RM1.1bil. Funding details and further disclosures are currently still under review. However, we reckon PLUS will likely to tap into its existing Islamic Medium Term Notes facilities to raise part of the required funding. We forecast PLUS' net gearing levels at 128% in F10F against 134% in FY09.
It said on Wednesday, July 7 that at RM4, the share price is pegged to a 15% discount to its DCF value (WACC: 7.5%). This is well supported by strong free cash flow generation and alluring FY10F-12F yields of 5%- 7%.
'Key re-rating catalyst for the stock would include: (i) Stronger-than-expected traffic growth trajectory in 2H 2010; (2) Scheduled tariff hike in 2011F; and (3) Potentially value-accretive investments abroad,' it said.
PLUS EXPRESSWAYS BHD [] (PLUS) announced that Ministry of Works has approved its unit Projek Lebuhraya Utara-Selatan Bhd's (PLUS) request to undertake CONSTRUCTION [] of a fourth lane along certain stretches of its expressways.
The expressways concerned are the North-South Expressway (NSE) and New Klang Valley Expressway (NKVE). The expansion of an additional lane is for certain stretches along both expressways. This would include Shah Alam to Rawang, Shah Alam to Jalan Duta and a section from Nilai (North) to Seremban.
Estimated cost of the project is RM1.1bil. Funding details and further disclosures are currently still under review. However, we reckon PLUS will likely to tap into its existing Islamic Medium Term Notes facilities to raise part of the required funding. We forecast PLUS' net gearing levels at 128% in F10F against 134% in FY09.
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