Target price on Boustead Hldgs raised

9.10.2010

HwangDBS has raised its target price on Boustead Holdings to RM6.70, with a "buy" recommendation.

The research outfit said Boustead "remains our high conviction pick. We nudged up our price target to RM6.70 after updating market values of its listed entities and applying similar 20 per cent holding company discount.

HwangDBS noted that Bousteads 65 per cent-owned BHIC announced that its associate company, Boustead Naval Shipyard had received a LOI from the Malaysian Ministry of Defence to construct six second-generation patrol vessels with combatant capabilities.

The contract value and duration were not disclosed pending negotiation with the government.

But if the initial six vessels are a benchmark, this could be worth at least RM6.7 billion, almost triple its current RM2.5 billion orderbook.

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