Hock Seng Lee to be a beneficiary of booming SCORE, Samalaju projects

Borneo Post February 11, 2012, Saturday

KUCHING: Hock Seng Lee Bhd (HSL) is set to benefit from the massive and rapid developments of the Sarawak Corridor of Renewable Energy (SCORE) and in particular, the Samalaju Industrial Park.
“We believe there will be a flurry of job announcements in the weeks and months ahead relating to Sarawak’s SCORE updates,” AmResearch Sdn Bhd (AmResearch) stated in its research report yesterday.
It highlighted some projects such as the Sarawak Hidro Sdn Bhd’s plan to ramp up the 2,400 megawatt Bakun hydroelectricity dam, Sarawak Energy Bhd’s (SEB) possible RM6 billion expenditure on the development of a coal-fired power station in Balingian, Mukah and a 500 kilovolt transmission network linking Bintulu to Kuching this year.
SEB had also recently formalised a second Power Purchase Agreement with OM Materials Sdn Bhd for a 20-year supply of 500megawatt to power the latter’s US$500 million manganese and ferrosilicon alloy smelting plant in Samalaju.
“This followed an earlier pact between SEB and Asia Minerals Ltd for the supply of 270 megawatt of power to a similar project estimated at RM790 million,” the research house informed.
The future appeared bright for HSL as AmResearch opined that it would be a direct beneficiary of the massive and rapid developments within SCORE, given its expertise in infrastructure and construction works and specifically in land reclamation.
“HSL currently has RM1.6 billion worth of projects in hand, of which RM1 billion is outstanding. We also understand that HSL is actively bidding for energy-related projects as well,” added the report.
AmResearch still anticipated some potential projects in the pipeline such as the remaining packages of the Kuching central sewerage system worth approximately RM1.7 billion, additional flood mitigation packages in Sibu worth RM250 million, the development of a port and additional water treatment plants at Samalaju and various road and rural water supply jobs.
With the numerous large-scale projects taking place in the state, the research house believed that HSL was well positioned for some multi-year rerating prospects, as it went on to peg a fair value of RM2.44 per share for the company.
It had also tweaked HSL’s earnings forecast for financial year 2011 by four per cent but increased its financial year 2012 and 2013 forecasts by one to five per cent, driven by the recent news flow.