HLIB Maintains 'Buy' on Wasco Bhd with Target Price of RM1.49 Amid Recovery Potential
Hong Leong Investment Bank (HLIB) maintains a 'Buy' recommendation for Wasco Bhd with a target price of RM1.49, citing potential earnings recovery and market valuation reassessment. The firm emphasizes Wasco's benefits from the global oil and gas recovery cycle, particularly in the offshore and LNG segments.
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Wasco Bhd is projected to benefit from a recovery in the oil and gas industry, particularly in offshore and LNG segments, according to HLIB. The company's shares are currently trading at a low valuation of around 7 times the estimated earnings for FY2026, compared to a five-year average of 16 times and an industry average of 12 times, indicating potential for upward adjustment.
Wasco's strong fundamentals include a RM2.8 billion order book and a RM12 billion tender book, providing good revenue visibility. Short-term growth is expected to be driven by engineering services, especially with anticipated project awards in FY2026. External factors such as Middle East tensions could also enhance global energy spending, benefiting Wasco.
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