Aug 15 16:51
Apex Securities Research starts coverage of HSS Engineers with a Buy call citing strong order replenishment rate, improved cashflow visibility with Baghdad Metro project moving into more active execution stage, and expected finalization of the tendering process for the MRT3 project. "As engineering progress advances in FY25, the share of revenue from this contract (Baghdad Metro) is expected to climb further, improving the group's operating cash-flows in the process," says house in investor note; adds, MYR2.1 billion order book offers revenue visibility for next eight years. It expects HSS to benefit from a meaningful upside in MRT3 project-related revenue beginning in FY26 by leveraging its earlier engagement in the design phase. Apex sets target price at MYR0.75 based on 7.2 times price-earnings multiple applied to projected FY26 EPS of 10.3 sen and supported by a three-star ESG rating. Stock down 0.8% at MYR0.635 after 884,700 shares changed hands.