Phatra Securities points out that “We are not concerned with any downscale on mass transit projects as our estimates have only partially taken into account the MRTA projects”.
Limited impact on 2005 estimates: “We believe the news would have some impact on new projects signed for some contractor companies. However, the impact on 2005 estimates is minimal. Meanwhile, the impact on 2006 estimates would depend on the value and timeframe of MRTA lines that are out for bidding.
ITD has more reliance/leverage on MRTA projects: “In our opinion, Italian Thai Development (ITD) would be more affected by further delays in MRTA
projects. Without MRTA projects, we expect ITD’s earnings to be cut by 20% on 2006E versus 11% on Sino Thai Engineering & Construction’s (STEC) 2006E.
“STEC is our top pick: We maintain our positive stance on contractor
companies as we believe that MRTA projects will be up for bidding next year.
STEC is our top pick in the sector with share price objective of Bt14.50, due
primarily to the expected margin expansion from its power projects as well as
the company’s lower dependence on MRTA projects.”
ITD-attractive play on infrastructure theme: “We believe all contractor companies would benefit if any mega projects are up for bidding. However, we think ITD has the highest leverage on MRTA projects given its large equity base and ample resources. We estimate ITD can secure another Bt150bn in new projects without financial constraints.”
Limited impact on 2005 estimates: “We believe the news would have some impact on new projects signed for some contractor companies. However, the impact on 2005 estimates is minimal. Meanwhile, the impact on 2006 estimates would depend on the value and timeframe of MRTA lines that are out for bidding.
ITD has more reliance/leverage on MRTA projects: “In our opinion, Italian Thai Development (ITD) would be more affected by further delays in MRTA
projects. Without MRTA projects, we expect ITD’s earnings to be cut by 20% on 2006E versus 11% on Sino Thai Engineering & Construction’s (STEC) 2006E.
“STEC is our top pick: We maintain our positive stance on contractor
companies as we believe that MRTA projects will be up for bidding next year.
STEC is our top pick in the sector with share price objective of Bt14.50, due
primarily to the expected margin expansion from its power projects as well as
the company’s lower dependence on MRTA projects.”
ITD-attractive play on infrastructure theme: “We believe all contractor companies would benefit if any mega projects are up for bidding. However, we think ITD has the highest leverage on MRTA projects given its large equity base and ample resources. We estimate ITD can secure another Bt150bn in new projects without financial constraints.”