ITD stock rises after tech-round successes
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Italian-Thai Development's stock price yesterday surged 4.58 per cent to close at Bt8 as its joint venture company ITD-Power China JV became one of the winners of the technical round of the government's Bt350-billion water-management project.
ITD-Power had the highest scores in five of the project’s nine construction modules. The five modules – A1, A2, A4, B1 and B3 –are worth a total of Bt11 billion.
Meanwhile, Korea Water Resources Corporation (K-Water) won the A3 and A5 modules worth Bt16.30 billion. Summit SUT Joint Venture (Samprasit Partnership, Sky Construction and Union Infartech) won the highest score in the B2 land-use module worth Bt13.93 billion, while the Loxley consortium won in the data storage/warning system modules (A6/B4) worth Bt4 billion.
Loxley stock yesterday also rose 3.68 per cent to Bt7.05.
The Strategic Committee for Reconstruction and Future Development, which opened the bidders’ technical documents yesterday, called in all of them in the evening to negotiate on the price proposals. The talks are expected to be wrapped up in the next few days.
ITD at present has a backlog of Bt240 billion, according to an analyst at Maybank Kim Eng Securities (Thailand). The additional five construction modules would generate regular revenue for the company.
Maybank Kim Eng recommended “buy” at the target price of Bt9.5 as ITD has sufficient potential to join the bidding for the government’s Bt2-trillion infrastructure project and the Dawei project in Myanmar.
However, the water-management project has risk for bid winners as they are required to handle public opinion, health impact assessments and land expropriation over five years, which that might push up costs and cause construction delays.
An analyst at Kiatnakin Securities suggested that investors buy ITD stock at the target price of Bt8.30 based on the bright outlook of the construction projects. However, it noted that it would closely watch how ITD sustains gross profit margin and deals with the shortage of construction labour, as the latter has caused project delays in the past.
Asia Plus Securities noted that the modules ITD may win accounted for 61.4 per cent of total project value. ITD is expected to sell some assets such as potash mines to improve liquidity, as new investments will require new loans, increasing the debt-to-equity ratio.
