Monday, September 26, 2011

WahSeong ... Sep11

It is expected to be a prime beneficiary from the North Malay Basin project which Petronas and its production sharing contract partners will develop, including a new 200km pipeline to transport gas from the fields to Kerteh, Terengganu.

The tight timeline - extracting first gas by 2013 - could see Wah Seong securing a major coating job as soon as 1H12. Petronas might call for bids as early as end-2011 to meet the tight timeline.

Wah Seong’s RM1.3 billion order book would drive its earnings. Its motable major contract wins are the RM137 million APLNG contract (starts in 4Q11) and RM85m Kebabangan contract (starts in 3Q11), which will contribute positively in 2H11 and FY12.

Wah Seong Corporation Bhd is in a better shape to weather a downturn now, compared to 2008, given its strong order book to anchor earnings and a firm balance sheet with only a 15 per cent net gearing.

It is expected to ride on the government’s efforts to fast-track gas field exploration to solve the critical gas shortage.

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