KGI Securities has initiated coverage on Civmec with an “outperform” rating and target price of 86 cents.
This comes after the engineering service provider, which operates in the oil and gas, metals and minerals, and defence and infrastructure sectors, posted a stellar set of 9MFY2021 results ended May 31.
Notably, Civmec’s top and bottom lines during the period had exceeded its FY2020 results, KGI highlights.
Compared to the FY2020 figures, the company’s 9MFY2020 revenue, gross earnings and net earnings increased 25%, 20% and 37% respectively.
See also: With yearly profitability intact and record order book, Civmec seeks growth opportunities
The outperformance was largely driven by the company’s metals and minerals business.
KGI points out that China’s demand for iron ore has driven up iron ore prices to a record high in May 2021.
“As Civmec’s customers mainly belong to the Metals & Minerals industry, tight supply and increased demand would create more opportunities for mining and exploration projects, in turn benefitting Civmec as a solutions provider,” KGI analyst Megan Choo writes in an Aug 12 report.
As at 2.35 pm, Civmec was up 0.5 cent or 0.7% at 75 cents with 457,100 shares changed hands.
