HSL (BUY) - FY11 another record year

HSL (BUY)

FY11 another record year

• HSL posted another record earnings as FY11 earnings grew by 19% to RM87.3m (15.8 sen/share) beating streets’ estimates slightly but 3% below our forecast of RM90m.
• Net dividend of 1.8 sen/share declared. Hence, total FY11 dividends declared was 2.7 sen/share. Also, 1-for-50 treasury share distribution announced which works out to additional 3.3 sen/share at current share price of RM1.65.
• Overall, the HSL has an outstanding order book of ~RM1.1bn, translating to ~2.0x FY11’s construction revenue and ~1.1x order book-to-market cap ratio.
• With the improved newsflow for the construction sector and potential in award of SCORE projects picking up, we maintain our BUY call on HSL with a TP of RM2.21.

Source: HLIB Research 29 Feb 2012