KUALA LUMPUR: The RM743 million contract for the Kuala Lumpur International Airport (KLIA) aerotrain project is the biggest win for Pestech International Bhd since its listing, said Kenanga Research.
This would boost Pestech's total order-book from RM1.58 billion as of September 2021, keeping it busy for the next three years, Kenanga Research said in a report today.
Yesterday, Pestech said its wholly-owned Pestech Technology Sdn Bhd had finally secured the long awaited contract for KLIA's automated people mover aerotrain project, to replace the aging aerotrain system, from Malaysia Airports Holdings Bhd (MAHB).
The contract, which is option 2 under the tender by MAHB, was inclusive of financing plus a 10-year O&M contract, Kenanga Research said, adding that the amount explained why the contract value is higher than what market was speculating at RM400 million previously.
"This is highly positive which adds a new profile to Pestech and will be a good reference for future airport train system tender regionally," it said.
Under the agreement, the EPCC project which uses Bombardier transportation technology, will commence from March 2022 for three years to March 2025.
The 10-year O&M services will start from March 2025 to February 2034.
While the win tallied Pestech's financial year 2022 (FY22) actual order-book replenishment to RM900 million which is higher than Kenanga Research's new win assumption of RM800 million, it is still within the latter's revenue forecast based on project timeline.
As such, Kenanga Research said it had kept its FY22/FY23 earnings estimates on Pestech unchanged for now.
The firm also maintained its "Outperform" call on Pestech.