Industrial gas

Existing top 30 shareholders

Kgb director ex mox gm air liquide md

Trade war appears to see some progress after summit.
FM may start sell some after accumulated so much over last 6 months
Free float now about 30%. The balance control by founders and FMs.

KUCHING: Kelington Group Bhd (Kelington) remains optimistic on its Ultra High Purity (UHP) business and believes that its long-term growth outlook in China, Singapore and Taiwan remains intact.


The team at Affin Hwang Investment Bank Bhd (AffinHwang Capital) said despite a recent slowdown in China’s semiconductor capex, Kelington’s Singapore business will likely cushion the short-term decline driven by expansion, while Taiwan will likely see higher activities ahead with active bidding in solar projects.

“Kelington’s 2019E 29 per cent EPS earnings growth will likely continue to be driven by its UHP business,” it affirmed in a report yesterday.


Fabrication work for the plant’s equipment was done in China and will be delivered by the 1st week of July.

“While the focus has not permanently shifted away from China with the expansion of wafer fabrication plants still looking promising, the spotlight will shine on the UHP projects in Singapore, which also generally command a higher margin.”

While contribution from Kelington’s Taiwan region has fallen from a high of 11 to two per cent in recent quarters, Affinhwang Capital was appeased by management plans to refocus efforts in this region by actively bidding for more solar-related installation and maintenance projects. Notably, the bulk of the current RM1.2 billion backlog is still largely focused in China.

This was on the back of Kelington’s liquid carbon dioxide plant being on track to start up by the third quarter of this year (3Q19).

“The piling work for the site has been completed.


KGB has taken delivery of its tankers and is currently in the process of strengthening its chassis; it is on track for concurrent completion with the plant.

“Fabrication work for the plant’s equipment was done in China and will be delivered by the 1st week of July.

Meanwhile, construction work is expected to commence in mid-July and targeted to be completed by September.

“To date, management has spent RM30m out of the RM50m estimated project capex, with the remainder to be used progressively to expand the CO2 tankers fleet.

KGB has secured orders for 30 per cent of the capacity, mostly by cylinder refillers as the end gas users generally prefer to see the product quality once the plant has started operation.

“This plant is expected to contribute about 8 per cent of total profit in FY20E, which we have already factored into our model.”

KUALA LUMPUR: Kelington Group Bhd is confident of achieving another record year for the 12 months ending Dec 31, 2019 (FY19), which will mark a fourth straight year of record net profit after a blip in FY15.

The integrated engineering solutions provider swung into a net loss of RM2.62 million in FY15 as it recognised impairment losses on certain projects, trade receivables and amounts owing by customers. However, it rebounded the following year and has been profitable since.

Group chief executive officer Raymond Gan Hung Keng said FY19 profit growth will be driven by its ultra-high purity (UHP) business, which continues to be the group’s anchor of growth.

“I am confident we will [perform] better this year, thanks to a higher proportion of UHP jobs that bring higher profit margins,” he told The Edge Financial Daily in an interview.

He added that the bulk of the group’s outstanding order book totalling RM330 million will be recognised this year.

Kelington reported its highest-ever annual net profit in FY18, which jumped 59% year-on-year (y-o-y) to RM18.32 million with revenue up 12% y-o-y to RM350.02 million.

The record earnings had a favourable impact on its share price, which rose to an all-time high of RM1.39 on April 25. Its price has since pulled back, closing at RM1.25 last Thursday, but still up 51% from 83 sen a year ago. This brings the group’s market capitalisation to RM379.59 million.

On its performance in the first quarter of FY19 (1QFY19), it is on track to meet its full-year expectations. The group’s 1QFY19 net profit was up 5% y-o-y at RM4.84 million despite a decrease in revenue to RM76.41 million from RM86.55 million in 1QFY18.

Year-to-date, Kelington has clinched new projects totalling RM146 million, 87% higher than the RM79 million achieved in 1QFY18. This brings the group’s total outstanding order book to RM330 million, 70% of which are derived from UHP projects, followed by process engineering (16%), general contracting (4%) and industrial gas business (1%).

Gan declined to give the group’s order book target for 2019, except to say that it is still too early to tell.

The total value of projects clinched by Kelington last year hit record of RM424 million, surpassing the RM374 million achieved in FY17.

Gan said the group is tendering for RM1.2 billion worth of jobs, in Malaysia, Singapore, China and Taiwan.

He noted that so far, there has been no slowdown in the number of tenders from China, despite ongoing trade tensions between the US and China and negative growth data recorded on the latest worldwide spending on semiconductor equipment.

Of the group’s total outstanding order book, China accounts for 15%, followed by Singapore at 59% and Malaysia, 17%. The most recent order the group secured was from China, a RM53 million new contract for specialised engineering works under the UHP segment for wafer fabrication.

According to the US-based Semiconductor Equipment and Material International data, China remained as one of the top three world’s largest semiconductor equipment spenders in the first quarter of 2019 (1Q19) with billings of US$2.36 billion, down 11% y-o-y from RM2.69 billion. Still, China outperformed worldwide spending on semiconductor equipment, which declined 19% y-o-y to US$13.79 billion.



Industrial gas business to take off in FY20

On its industrial gas business segment, where it made its first foray in 2016, Gan said the business is profitable albeit its contribution to the group’s revenue is still immaterial.

However, he expects its contribution to take off from FY20 when the group’s liquid carbon dioxide (LCO2) manufacturing plant in Kerteh, Terengganu commences production in 4Q19. It is setting aside RM60 million in capital expenditure for the new plant, half of which will be used this year and the rest progressively over the next five years.

Already, Kelington has secured orders for the new LCO2 plant, which will take up some 20% of total annual capacity of 50,000 tonnes.

Additionally, it has secured a 10-year contract to supply on-site nitrogen gas to a photovoltaic manufacturer’s manufacturing plant.

https://www.thestar.com.my/business/business-news/2019/05/21/rhb-research-retains-buy-on-kelington-with-higher-target-price/

Pls expedite made in china 2025

KWAP and now kenanga growth fund as kgb substantial shareholder. Prospect is good

Another substantial holder emerged

crack spread widen. oil price mom up benefit refiner, oil price mom down refiner go holland

Need to secure investors before proceed else where to get funding n financing. Like ecrl trx the investors are government. Watch out

Without investors project cant start...watch out

TRX. Also need yo find investor

No investor how to build no funding and where to finance for the projects. Have to wait the plan out 1st.

Govern will sit there to share profit. While 60% owned have to folk out funds. Need to wait the blue plan out otherwise 1st few year just dump fund in

Develop over 20 to 25 years. The most inportant is to get financing and look for investors. Not to forget 1.2B deposit must be paid within 60days

Incorporated 2 comp in china in dec18 and apr19. Hmm....

Warrant left abt 9mils only

Good can sapu

Shpg22 then what valuatio you mentioned here? Contradict?

Wait the expiry of warrant no worry now

Need fund to convert warrant

Derrick. I do agree with you. However, if the oil price can sustain at 80 for the next 6 months. I think they are able to cope all the capex and the acquisition as per the announcement without having to for financing. So i dont see any problem at this moment. For subsequent plan need to depend on the oil price and etc.

Cash*

Internal funding guys. 250m by end of sept

1Q19. 250m at least. Analyst ald said in their report. 3 lifting.

1Q19. 250m at least. Analyst ald said in their report. 3 lifting.

New royalty only applicable for new contract la...how to renegotiate the binding contract? Psc contract is not entered in good faith?

Why need cash call? By end of q1 cash reserve should be 220 to 230m. By end of dec. Most probabbaly 300m and above. No loan. Capex of 40 to 50m in usd wont require hib to inject immediately. But progressively over 1 2 years. Every quarter still generating handsome operating cash flow. Analyst had on 19/9 updated their report that 3 offload have been done in this quarter. Revenue will be at least 250m. Q1 will be a new fy to really see how much they earn from. Just be patient. Its supported by figure and fact. No need 85 or 90 in oil price. 75 is good enough for hib

How much cash reserve will go up this quarter. Wait and see. What to worry of internal funding. 2 years 200m progressively la

No need worry 1st q result. 250m and above. 3 offtake confirmed by analyst.

It was reported that HIBISCS has completed 3 liftings in 1Q19 across both assets, 2 from Anasuria and 1 from North Sabah.

The management is prudent in managing comoany financial position. Cash reserve will be growing to back the debt which will be used to finance the opex and etc. This is a good sign.

Soon this share will be targeted again. Nothing much stocks will have good quarterly earnings

After goldsanch. Morgan also revised oil price upward i.e. 85 for 2h18

CYQ2 result should be good. Profit should be around 75m

Extra supply to cover venu and dmd pick up in 2H. Thats why oil price not down but up. Also bcos market doesnt not believe they can supply extra 1m. As some ald produce at max cap

2H typical high demand in oil

Inventory built up

Production will increase price will down but not to 50 - 60. Shall be stay at above 70

Brent will be at the rangeof 75 to 80. Too high lead to inflation. Over manipulate the brent for aramco ipo will tough for investor to value the ipo. Analyts reports forecast range at 60 only. A correction after a 20% increase is a must. Need not so worry. Stabilize at 70 and above will be very good to oil players

Support by high oil price

Ready for low cost project to cheer for ajiya share price

https://www.cnbc.com/2018/05/08/oil-prices-fall-as-the-market-awaits-trumps-iran-nuclear-deal-decision.html

Inverse relation btwn Oil price and usd getting weak. Will benefit hibiscus.

Scare irb look after eko.

Xi statement is clear. No more down trend for kesm

https://www.cnbc.com/2018/04/09/chinese-president-xi-jinping-speaks-at-boao-forum-for-asia.html

Ar this range of price. Changes in the price will cos u huge loss or gain. So dont rush. Make a right call at this violatile market