PROBABLE BENEFICIARIES OF 2019 BUDGET – ENGTEX and MKH

The 2019 Budget will be tabled tomorrow, 2/11/2019. As usual, there will be beneficiaries and victims arising from this budget. ENGTEX and MKH may emerge as two of the beneficiaries.  

ENGTEX (Initiated price: RM 0.92)

The aged underground domestic water pipes replacement work has been long overdue. In August and September 2018, the existing shareholders of water concessionaire in Selangor, SPLASH Holdings has accepted the offer from Selangor government to take over the company. This has cleared some hurdles for the pipes replacement project to be carried out smoothly and efficiently.

In this coming budget, it is expected that a sizable allocation would be made for the project. Engtex will be the biggest beneficiary of the probable project. It is the biggest domestic water pipe manufacturer in Malaysia and it has excessed production capacity to cater for the sudden surge in demand. In fact, Engtex has increased its production capacities of Ductile Iron Pipes and Mils Steel Pipes to cater for this high pipe replacement demand.    

MKH (Initiated Price: RM1.23)

Finance Minister, Lim Guan Eng has indicated that measures and incentives will be announced in the 2019 budget to increase the affordable housing ownership. We are hoping that the bank approval requirements will be loosened up and margins of financing could be increased.    

MKH should be a major beneficiary from these measures. In fact, MKH has quite many projects that fall under the affordable category. They currently have two PRIMA projects namely PRIMA @ Kajang and PRIMA @ Bandar Teknologi, both in Kajang.