RHB maintain 'buy' on Pestech
RHB Research, which maintained a buy call on Pestech International with a marginal higher fair valuation of RM2.82, is
upbeat over the company's growth after it secured a US$29.3 million contract from Electricite du laos, to build a double circuit transmission line in Laos.
The project will commence in December and is expected to be completed in 18 months.
"We are upbeat over this news. With this first contract making a foray into the Laos market, Pestech is one step closer to become a regional player in the power transmission system industry.
"Overall, Pestech’s fundamentals remain unchanged, with its growth boosted by strong orderbook, while it continues to look for business opportunities in local and overseas markets," it said in a research note today.
RHB Research said the land locked country had huge potential in hydropower generation as it could capitalise from the orientation of the Mekong River flowing through the country.
Laos government planned to build 10 large dams and increase household electrification rate from 65 per cent in 2012 to 80 per cent by 2015.
The company had replenished its orderbook by an additional RM187.8 million, exceeding RHB Research's projected target of RM175 million.
Earlier this month, the company secured a RM95.6 million contract from Sarawak Energy Bhd to build a 275/33kV sub-station in Mapai, Sibu.-- Bernama