Here's how Yongnam Holdings can benefit from the Myanmar airport project

Investment value is at US$850m.

According to CIMB, YNH has joined a consortium comprising JGC Corp and Changi Airport Group to evaluate the requirements for tendering for the construction and management of the Hanthawaddy International Airport in Myanmar. 

The consortium has been prequalified to submit a tender for the project. The award of the tender for the project is subject to the approval of the Myanmar authorities.

CIMB understands from industry sources that this is a BOT project,with an investment value of c.US$850m. 

It also adds that the project would provide recurring earnings as opposed to the merely project-based income that Yongnam currently has. Yongnam is keen to pursue offshore structural projects and investment opportunities in infrastructure development that complement its core business capabilities. 

Here's more:

While preliminary, this latest developmentis consistent with the group’s business development and long-term strategy, one of the aims of which is to sustain and enhance equity value and returns by leveraging the group’s core businesses.

The group’s experience and knowledge will help it identify appropriate and profitable development projects, as well as manage the development process.
Our target price remains set at 6x CY14 P/E, its 3-year mean. We reiterate our Outperform rating, with potential mega projects being the stock catalyst. 

Should it come to fruition, the project would result in an overall enhancement of Yongnam’s shareholder value. But there are other reasons to buy Yongnam. We expect previously-delayed projects to ramp up in 1Q13. Also, the group has secured various landmark projects that will boost earnings in FY13.

Yongnam’s biggest capacity lies in Nusajaya, Johor and is capable of supporting its project pipeline in Malaysia. The group is looking at various high-profile projects in Malaysia that look more like low-hanging fruits for it.