OCBC has maintained a "buy" call on Libra Group, with a fair value estimate of S$0.33.
Last month, Libra announced it had bagged S$11.3 million of mechanical and electrical engineering (M&E) contracts. This brings its year to date order book to an estimated S$105.6 million, OCBC said.
"We believe the group is on track to receive profit after tax and minority interests (PATMI) forecasts of S$4.7 million and S$7.8 million in FY14 and FY15 respectively."
Libra's latest awards were secured through its subsidiary Kin Xin Engineering. They include a S$6 million M&E sub-contract for a residence hall development in Nanyang Technological University (to be completed by January 2016), a S$4.2 million sub-contract for an industrial development at Sin Ming Road and a project for Ngee Ann Polytechnic worth S$1.1 million. The latter two are expected to be completed this year.
As the group aims to increase market share for its coil resale business, some erosion in the segment's gross profit margin is expected, said OCBC.
But this should not be a cause for concern, it added. "We maintain our view on Libra's significant earnings growth potential underpinned by their strong M&E business. There is good value at current levels and we remain positive on Libra's growth prospects.
On Tuesday, Libra was trading unchanged at S$0.20.