Along with work in hand, CK will soon sign construction contracts worth Bt10 billion, president Plew Trivisvavet said yesterday.

Plew said the current backlog and the soon-to-be-signed contracts would be the company's main source of income between now and 2008.

The backlog should also protect the company from losses due to a further delay in government mega-projects, which are now not expected to begin construction until 2008 or 2009, he said.

Plew estimated that his firm's revenue would rise to Bt17 billion this year,

thanks to the Nam Ngum Two project in Laos, the South Outer Ring Road projects and a drainage project at Suvarnabhumi Airport.

KGI Securities (Thailand), the Kingdom's leading forecaster on the construction industry, predicts Ch Karnchang's gross margin will rise 12-15 per cent this year, largely due to falling oil and steel prices.

It also forecast that CK would lead the construction industry with a 2007 net margin of 3.8 per cent.

The broker cited Ch Karnchang's long-term public concession investments as the cause for this. KGI has given the stock an "outperform" rating.

Ch Karnchang's normalised profit for 2007 is expected to increase 390 per cent year on year to Bt684 million.

Of the country's three biggest construction contractors, Ch Karnchang is in the best position due to the backlog it is has gained thanks to its 'quality over quantity' bidding policy.

This policy is witnessed in the company's gross margin of 10-15 per cent on the Nam Ngum Two project, significantly higher than the 4-5 per cent of Italian-Thai Development's Baan Ua Athorn project and the minus 10 per cent of Sino-Thai Engineering & Construction's Airport Rail Link project.

KGI predicts Ch Karnchang's sales for 2006 will remain strong at Bt17.2 billion, up 24 per cent from last year. Those sales, along with the huge gains the company will reap from the sale of Thai Tap Water, will allow it to post an impressive net earnings growth this year of Bt1 billion, up 48 per cent on 2005.