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Analysts cheer Civmec as it captures higher capex and contracts

The Edge Singapore
The Edge Singapore5/26/2022 03:44 PM GMT+08  • 5 min read
Analysts cheer Civmec as it captures higher capex and contracts
The location of Civmec's facilities is seen as a competitive advantage / Photo: Civmec
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Australia-based engineering and construction company Civmec’s overall prospects are brightening, as seen from its growing order book that has crossed over A$1 billion, including A$120 million worth announced on May 25.

On May 11, Civmec, which is dual-listed in Australia, reported 3QFY2022 ended March earnings of A$21.1 million, up 35.7% y-o-y, bringing its 9MFY2022 earnings to A$34.7 million, up 45% y-o-y.

In his May 23 report, DBS Group Research’s Paul Yong initiated a “buy” call on the stock with a target price of 88 cents. He notes that Civmec is now trading at a FY23 forward P/E ratio of 6.6x, which is a discount relative to its peers’ median of around 9x. “In our view, Civmec’s discount is unwarranted, given its higher earnings growth and margins relative to its peers,” writes Yong.

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