CTCI Corp’s (中鼎工程) revenue and earnings are likely to grow significantly next year after this year’s slump due to revenue delays and effects of the COVID-19 pandemic, Yuanta Securities Investment Consulting Co (元大投顧) said.
The nation’s largest construction and power engineering service provider is forecast to see revenue and earnings increase by about 12 percent and 68 percent respectively year-on-year next year, as the company might book delayed revenue from some projects, while multiple orders from the past two years are also likely to make a contribution, Yuanta said in a report on Wednesday last week.
The forecast came as the company’s revenue in the first eight months of the year dropped 10.47 percent year-on-year to NT$33.72 billion (US$1.16 billion), and net income in the first half of the year fell 37.09 percent to NT$310.47 million, according to filings with the Taiwan Stock Exchange.
“We are positive on CTCI as the company is Taiwan’s top hydrocarbon EPC [engineering, procurement and construction] contractor and has expanded its business beyond petrochemical, penetrating into the power, transportation, general industrial and environmental segments,” Yuanta analyst Lisa Chen (陳玫芬) wrote in the report.
“Rising environmental protection awareness should be positive for its operations.,” Chen added.
“CTCI has successfully made inroads into the international market, in which it should see more opportunities going forward,” she said. “The company is also to benefit from Taiwan fund flow-back and plant construction.”
At a beam-raising ceremony for the company’s new headquarters in the Beitou Shilin Technology Park (北投士林科技園區) in Taipei on Sept. 22, CTCI said it had a construction backlog of NT$285.8 billion and NT$127.3 billion in new contracts as of Sept. 25, record highs for the company, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) reported last week.
New contracts were mainly from Taiwan, which accounted for 96 percent of the total, while 86 percent of them were for green energy and low-carbon projects, the company said.
Potential bidding opportunities for next year are estimated to be worth about NT$271.4 billion, with Taiwan making up 43 percent of the projects, including liquefied natural gas storage tanks and receiving terminals for CPC Corp, Taiwan (台灣中油), gas-fired power plants for Taiwan Power Co (台電) and offshore wind farm projects, while projects in the Middle East and Southeast Asia would account for 29 percent and 19 percent respectively, it said.
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