The research house said the newly secured contracts would boost the order book to RM541.4 million from RM338.7 million now while at the associate level, Boustead Naval Shipyard, the order book is RM2.84 billion.

"With this, management is on track to achieve its targeted order book of RM1 billion for FY08," it said.

The first contract was awarded by Carigali-PTTEPS Operating Company Sdn Bhd to provide its engineering, construction and onshore commissioning services of Muda living quarters building worth US$27 million (RM88.29 million), to be completed within 15 months.

The second contract is awarded by Sealink Sdn Bhd to Boustead Penang Shipyard Sdn Bhd to build two units of 7,000 DWT oil carriers/chemical carriers worth US$32.9 million.

The third contract was awarded by the navy to 51%-owned BHIC Bofors Asia Sdn Bhd to supply and deliver gun spare parts, worth RM9 million for three years.

It added that the announcements came as no surprise as management had in fact hinted of some surprises earlier on.

The research house rates the stock a buy with an unchanged target price of RM9. It has adjusted its earnings estimates to account for higher earnings in recognition of the two PVs in FY07, and lowering its estimates for FY08 and FY09.

Meanwhile, TA Securities Research maintained its buy recommendation on BHIC with a revised target price of RM9. The target price was based on an unchanged 16 times price earnings ratio, after it revised its indicative internal rate of returns for the new contracts and revised upward its earnings per share for FY08 and FY09 by 1.5% and 3.7% respectively.

"With a hefty upside of 34%, BHIC remains a buy (at Tuesday's closing price of RM6.65)," it said.

It had previously assumed that BHIC had an outstanding order book of RM790 million, including an assumed order book of RM250 million.

"Our assumptions are based on management's conservative guidance that their order book can surpass RM1 billion by end-2008 previously and hence the impact of the news on the three new contracts BHIC secured is not significant."

BHIC has received three new contracts. Two out of three are non-government contracts worth more than US$59.9 million, it said.

"These contracts certainly have a significant impact on the company's earnings for FY08. Given the timeline as disclosed in the announcement, it is safe to assume that some earnings may trickle into FY10 as well. As all the contracts are undertaken by its subsidiaries, the company stands to reap the benefit," it said.