NWR: Small but Strong

Nawarat Patanakarn Public Company Limited (NWR) is undeniably one of the top 5 infrastructure stocks in the Stock Exchange…But hasn’t participated in any big project bidding lately, unlike other three big companies; Ch. Karnchang Public Company Limited (CK), Sino-Thai Engineering and Construction Public Company Limited (STEC) and Italian-Thai Development Public Company Limited (ITD).

While NWR is generally a subcontractor which performs a specific work of another’s contract.

But recently, NWR has announced the signing of 9,713-million Baht Construction of the 3rd Runway and Taxiway D Extension and the Perimeter Taxiway at Suvarnabhumi Airport Contract, an infrequent direct contract acquired.    

NWR teamed up with Thanomwongse Service Co., Ltd., a subsidiary of Tipco Asphalt Public Company Limited (TASCO), as the company doesn’t have a strong fundamental, therefore this partnership will heighten NWR’s income, leading to a higher margin and lower business cost.       

As of 2nd quarter ended, NWR records a backlog as high as 38,261 million baht, comprising 15,100 million baht from current projects and 23,200 million baht of waiting for the contract signing.

Moreover, for the period of July-September, NWR has been acquiring at least 5 projects; 1) the construction of the Mae Klong river extradosed bridge project  of A.S. Associated Engineering (1964) Co., Ltd. worth 267 million baht. 

2) The construction of B.Grimm Power (Laem Chabang) power plant project of TPSC (Thailand) Co., Ltd. worth 351 million baht.

3) The construction of Amata B.Grimm Power1 & Amata B.Grimm Power2; ABP1R & ABP2R project of TPSC (Thailand) Co., Ltd. worth 673 million baht.

4) The construction of the underground walkway tunnels through Maharaj road worth 174 million baht, and 5) the construction of the underground walkway tunnels through Na Phra Lan road project worth 766 million baht.

In addition, NWR isn’t that large scale business, enhancing the company to have more liquidity and able to survive amid the Covid-19 outbreak. For the first half of 2020, NWR collected a profit of 47 million baht. 

Analysts assessed NWR this year to post a total revenue of 10,350 million baht, an increase of 34% YoY and net profit will rise to 85 million baht, a rebound from a loss of 515 million baht last year. Analysts have given a “BUY” recommendation with a target price of ฿0.65/share.