Competition heats up for Acromec but big tenders ahead

SINGAPORE (Oct 10): RHB is downgrading Acromec to “neutral” with a target price of 78 cents, citing a slowdown in government tenders and potential competition from oil and gas engineering companies.

However, the specialist engineering company is expected to continue winning projects in 4Q16 and 1Q17, according to analyst Jarick Seet in a note published on Monday.

Acromec faces tough competition with potential new entrants from the oil and gas space and firms have begun to compete for public sector jobs in the healthcare space, says Seet. The steeper competition will potentially lead to compressed margins on projects tendered.

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