In a Bursa announcement yesterday, Sarawak Energy Bhd said it has awarded a LoA to Naim Holdings for the construction of Package B Part I and II of the 275KV Overhead Transmission Line Projects for Bakun-Similajau Transmission System. Since Leader is likely to be the lead supplier of wires and cables to this project, the company is poised to gain both directly and indirectly. Hence, given improving earnings visibility, we ascribe a higher PER of 8x against 6x previously to the company’s cable and wire division in our Sum-of-Parts valuation. This results in an upgrade on Leader’s target price to RM1.16 from RM0.93 previously. BUY call maintained.
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