Background

Kawan Renergy Bhd (KENERGY) operates as an engineering solutions provider, specialising primarily in the design, fabrication, installation, and commissioning of industrial process equipment, process plants, as well as renewable energy and co-generation plants. Additionally, the group is also an independent power producer, engaged in power generation and the sale of electricity.

IPO Statistic

The IPO entails a public issue of 144.5mn new ordinary shares and an offer for sale at an IPO price of RM0.30/share, which accounts for 26.3% of the group’s enlarged issued share capital.

Public Issue:

• 27.5mn new shares for application by the Malaysian public,

• 19.3mn new shares for application by eligible parties,

• 63.2mn new shares for MITI, and

• 34.5mn offer for sale of existing shares.

Main Competitive Advantages

1. Highly customisable engineering solution for its clients.

2. Vast diversification of clientele across different industries; and

3. Proven track record with 28 years of experience in the industry.

Valuation

At an IPO price of RM0.30/share, KENERGY is priced at a trailing PER of 11.2x FY23 core EPS. We value the company at 12x CY25 EPS, arriving at a fair value of RM0.55/share. Not Rated.

Source: TA Research - 13 May 2024