Top Story : Faber – More growth from IFM business
Outperform
Briefing Note
- Faber’s FY09 earnings were significantly boosted by the Integrated Facilities Management (IFM) business in UAE, especially from the “low-cost housing” and infrastructure facilities contracts which started contributing in Nov-09. We understand the “low-cost housing” contract has been extended for another year,
and we expect the infrastructure facilities contract to be extended in due course.
- Although Faber’s India IFM business contributed only RM20m revenue in FY09, the earnings outlook is positive given the full-year contribution from the hospitals segment (via its jv with Apollo Group) as well as the Hyderabad International Airport. The company will also be tendering for the New Delhi airport contract which is expected to be awarded by Oct-10.
- As for its property segment, the company currently has unbilled sales of RM30m and is currently on track to launch three property projects this year with an estimated GDV of RM495m. Sales from these launches will likely boost FY11-12 earnings.
- Faber reiterated that it had submitted its application for a renewal of the Government concession in Oct-09. A reply is expected in Oct this year. Management declined to comment on media reports that the company may buy Pantai Medivest, the second concessionaire.
- We have raised our FY10 and FY11 earnings forecasts by 18.0% and 24.0% respectively. We introduced our FY12 numbers. Our indicative fair value has been raised to RM3.30 (as shown in table 2) from RM3.01.
RHB Equity 360°- 04/03/2010
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