Monday, December 19, 2011

HDBSVR has Buy on Boustead Holdings, TP RM6.80

KUALA LUMPUR (Dec 19): Hwang DBS Vickers Research has a Buy call on Boustead Holdings with a target price of RM6.80.

It said on Monday that BOUSTEAD HOLDINGS BHD []'s 69% owned Boustead Naval Shipyard Sdn. Bhd had secured a major win after securing a Ministry of Defence (Mindef) contract to supply six patrol vessels with a contract ceiling of RM9 billion.

Boustead Holdings Bhd said its subsidiary Boustead Naval Shipyard had received the letter on Friday to design, construct and deliver six second generation patrol vessels.

The contract carries a ceiling of RM9.0 billion, to be implemented over three Malaysia Plans, 10, 11 and 12. The delivery of the first of class ship is estimated in 2017 with follow-on ships every six months thereafter.

HDBSVR said this was a major win for Boustead as well as for its listed subsidiary BOUSTEAD HEAVY INDUSTRIES CORP [] HIC (BUY, TP RM4).

'We may look to raise our FY12-FY13F EPS pending clarification with management as we had only expected a contract sum of RM7 billion,' it said.

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