OSK expect will better in 2H and maintain OVERWEIGHT to the sector. Despite the weak numbers on domestic contract flows in 2Q, OSK remain bullish on the sector. The KLCON has underperformed the KLCI by 4.3% YTD as investors have probably gotten impatient on the momentum of awards.
OSK views this as an opportune time to load up on the sector as contract awards should pick up in 2H as major projects such as the MRT, LRT and River of Life kick off.
The sector should also benefit from a potential early General Elections which we expect to be held this year.
Below are the target price for selected stocks in construction sector.