Monday, December 19, 2011

Boustead, BHIC top gainers in early trade

KUAL A LUMPUR (Dec 19): BOUSTEAD HOLDINGS BHD [] and BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd shares rose in early trade after Boustead Naval Shipyard Sdn. Bhd received the letter of award from the Ministry of Defence to supply six patrol vessels with a contract ceiling of RM9 billion.

At 9.05am, Boustead was up 19 sen to RM5.55 while BHIC added 18 sen to RM3.33.

Hong Leong Investment Bank Bhd Research in a note Monday maintained its Buy call on Boustead with a target price of RM6.50 based on 10% holding company discount to estimated SOP of RM7.23.

The research house said the letter of award was a positive surprise versus its RM7 billion assumption, and kept its forecasts, pending further details from management.

'Our envisaged catalyst has materialized and vindicated our positive view on the stock. The contract would keep its heavy industry division busy over the next 9 years.

'It will also help BHIC to mitigate losses suffered from the vacuum in jobs and cost escalation,' it said.

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