HSL: Buy, target price RM1.78

OSK Research Sdn Bhd has maintained a "buy" call on construction group Hock Seng Lee Bhd (HSL) (6238), saying its project wins are still within its replenishment target.

Including a recent win, HSL, year to date, has managed to secure RM345 million worth of jobs, which is on track to meet the research firm's full year target of RM400 million.

While the firm did not change estimates or raise its target price, it highlighted the possibility of further earnings and target price upgrade as HSL project wins, surpass its targets.

HSL has projected an orderbook replenishment sum of RM600 million.
OSK Research has a target price of RM1.78 for the stock, which is a 20 per cent premium to its historical one-year forward price earnings ratio, given its positive jobs momentum.

The research house also said it is fairly confident that HSL will win the job for Phase 2 of the Kuching Wastewater project, given its experience with the current phase. It thinks the job could be worth more than RM500 million.