Naim in the race for Pan-Borneo Highway job

KUALA LUMPUR: Naim Holdings Bhd, a Sarawak-based property development and construction company, is expected to win several new jobs, including the upgrading of the Pan-Borneo Highway that will cost more than RM10 billion, a source said.

The government is considering upgrading the 2,083km toll-free Pan Borneo highway, which was built in the 1960s. The upgrading is expected to start from Sematan in Sarawak to Serudung in Sabah and will take around five years.

The highway, which also passes through Brunei, will open up more rural areas via the construction of secondary or feeder roads.

Works Minister Datuk Fadillah Yusof said recently the upgrading of the Pan Borneo highway is one of the projects that is high on the priorities list.

“Its a promise made by Barisan Nasional in its manifesto,” he said.

There are not many big players in the state that is capable of handling the job, a source said.

Analysts said Naim and its 33.6-per cent-owned associate Dayang Enterprise Holdings Bhd are high on investors radar because of potential contracts in the horizon and jobs won over the past two years.

They have upgraded stocks of the two companies amid earnings growth prospects.

Naim secured two station packages of the Sungai Buloh-Kajang MY Rapid Transit Line project worth RM361.4 million.

It has also been named as one of the potential contract winners for engineering, procurement, construction and commissioning works related to Petroliam Nasional Bhd’s (Petronas) massive Refinery and Petrochemical Integrated Development (Rapid) Tank Farm project.

Dayang, an oil and gas support services entity, has won contracts worth RM2.31 billion from Murphy and Shell this year.

RHB Research Institute Sdn Bhd has increased its “fair value” for Naim by 119 per cent to RM3.42, on the back of positive earnings outlook.

In a March note, RHB Research analyst Joshua Ng had lifted the net profit forecast for Naim by three per cent for fiscal year 2013. It is optimistic on the earnings prospects for Dayang, in anticipation that it will secure more projects from Petronas.

Last year, both Naim and Dayang recorded a net profit of RM87.7 million and RM130.23 million, respectively.

The research division of MIDF Amanah Investment Bank Bhd believes that Naim is poised to benefit from several new projects, including the Pan-Borneo Highway.

“We expect Naim to be a big beneficiary of some of the projects mentioned in BN’s manifesto, such as the Pan-Borneo Highway.

“We also expect more activities in the construction of paved roads and in the rural electrification project,” MIDF senior vice-president and head of research Zulkifli Hamzah told Business Times.

Source: Business Times