Share price performance comparison between HARTALEGA and the rest

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-13-story-h-212436426-Gloves_Sector_Which_Share_Price_UP_THE_MOST_Discussion_about_KOSSAN_HAR

Share price performance comparison between TOPGLOV and the rest

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-13-story-h-212436426-Gloves_Sector_Which_Share_Price_UP_THE_MOST_Discussion_about_KOSSAN_HAR

Good company with long term growth prospect and higher dividend year after year

I still think PBA is worth RM2.50 because my Penang friend still use water to shower this morning. Many factories in Penang also use water with higher rates than last year.

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

Wah, utilities sector is powerful indeed! Just noticed this article become top in i3investor website.

Utilities Sector - Who's The Heavenly KING?

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-11-story-h-212518941-Utilities_Sector_Who_s_The_Heavenly_KING_Discussion_about_YTLPOWR_YTL_R

Utilities Sector - Who's The Heavenly KING?

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-11-story-h-212518941-Utilities_Sector_Who_s_The_Heavenly_KING_Discussion_about_YTLPOWR_YTL_R

Utilities Sector - Who's The Heavenly KING?

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-11-story-h-212518941-Utilities_Sector_Who_s_The_Heavenly_KING_Discussion_about_YTLPOWR_YTL_R

Utilities Sector - Who's The Heavenly KING?

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-11-story-h-212518941-Utilities_Sector_Who_s_The_Heavenly_KING_Discussion_about_YTLPOWR_YTL_R

Utilities Sector - Who's The Heavenly KING?

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-12-11-story-h-212518941-Utilities_Sector_Who_s_The_Heavenly_KING_Discussion_about_YTLPOWR_YTL_R

Uncle Koon, PBA PE is even lower because market has not noticed it yet.
Last quarter EPS is 11sen, times 4 = 44 sen.

Now trading at RM1.11, the PE is only 2.5x!

And the earnings is super solid because everyone in Penang and factories there use water everyday!
But not everyone buy property everyday...

Uncle, come read here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

Hi dragon, do you think YTL will acquire more stake in RANHILL (8x Forward PE) or other profitable water company like PBA (4x Forward PE)?

I wrote about Apollo when it was at RM4.08 back in April-2023, today already RM5.1

25% in 7 months, not bad!

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-04-04-story-h-274282357-APOLLO_3_Reasons_Why_This_Stock_Will_Surge_up_to_50

Is Wessex IPO possible? Water utilities company in UK trading at very high PE more than 30x... YTLP PE only <9x.

Now can pay road tax straight at JPJ website, MYEG income affected?

Spritzer share price +5% this morning and become the top 10 gainers in Bursa. What happened? Let's check out here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-28-story-h-214126694-Spritzer_Target_RM2_20_Still_Growing_Strong

There are 2 major news about water industry today:
1. YTLPower's Wessex Water PBT before interest accrual turnaround to +RM121.6m in latest quarter from -RM3.0m in March-June quarter.

2. YTLPower may want to do IPO of Wessex Waters in in 2025-2026 which may fetch a valuation of over RM23 billion.

These are positive for water shares including PBA.

I continue to believe PBA is worth RM2.50 (vs. current price RM1.15).

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

Wessex Water PBT before interest accrual turnaround to +RM121.6m from -3.0m.

Potential listing of Wessex Waters in in 2025-2026 which may fetch a valuation of over RM23 billion

Water business is the future!

YTL and YTLP very powerful indeed!

If you want to have a pure water play in Penang for stocks with potential to double, come and read this blog about PBA (Penang water company).

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

What is water sector transformation?

The government views water as an economic opportunity.

https://wst2040.my/

Strong earnings from Sunway, details as below

https://theedgemalaysia.com/node/690973

Next Q earnings will be stronger as Penang water industry user utilise more water while expense decline due to lower electricity charge by Tenaga.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3398547

14. Variation of results against preceding quarter
Group revenue increased from RM104.44 million to RM114.31 million as compared to the
immediate preceding quarter. The Group registered a profit before tax of RM29.15 million as
compared to the immediate preceding quarter of RM11.55 million, primarily due to lower energy
costs due to the waiver of ICPT charges by TNB for Water Operators for the second half of the
year.

Today Harta should up a bit due to good news from Kossan.


Kossan returns to black in 3Q with better cost controls, lower material costs
https://theedgemalaysia.com/node/690105

Kossan returns to black in 3Q with better cost controls, lower material costs

https://theedgemalaysia.com/node/690105

Amway (Malaysia) Holdings Bhd posted record earnings in the third quarter ended Sept 30, 2023 (3QFY2023) despite lower revenue, with net profit more than doubling year-on-year, as the group paid significantly lower incentives to its “Amway Business Owners”, in line with lower sales recorded. The improved profitability came after Amway issued a profit warning in August, after taking into consideration that inflation would squeeze consumers’ purchasing power and appetite to spend. Net profit for 3QFY2023 jumped 146% to RM46.21 million or 28.11 sen per share, from RM18.75 million or 11.41 sen per share a year ago (3QFY2022), despite revenue falling 10.3% to RM333.47 million from RM371.79 million.

https://theedgemalaysia.com/node/690147

UEM Sunrise Bhd’s net profit dropped 59.04% to RM8.34 million for the third quarter ended Sept 30, 2023 (3QFY2023) compared to RM20.35 million a year earlier, on lower operating profit margins. The property developer said profit margins decreased to 14% from 16% previously, due to higher selling and distribution expenses incurred by new project launches. Additionally, there was no recognition of fair value adjustment from investment in unquoted shares for the quarter. Its quarterly revenue fell 12.2% to RM312.35 million from RM355.76 million in 3QFY2022 amid lower revenue contribution from Residensi Solaris Parq in Mont Kiara, which was at the advanced stage of completion, as well as Serene Heights in Semenyih, Residensi Astrea in Mont Kiara, as well as Estuari Gardens and Aspira ParkHomes in Iskandar Puteri, Johor.

https://theedgemalaysia.com/node/690147

YTLPOWER has water asset in UK, good company...

PBA is Penang water play, why it is possible to DOUBLE from here? Read here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

Kenanga upgrades Westports to ‘outperform’, raises TP to RM3.80

https://theedgemalaysia.com/node/689602

@dollardollarbill, ya Penang need money for LRT so dividend from PBA is helpful

Want to know more about PBA? Read here for 6 reasons why PBA is worth RM2.50

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

6 reasons why PBA is worth RM2.50

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

5 reasons why PBA is worth RM2.50 (Part 2):

4. Utilities sector is HOT now. YTL Power, YTL, Tenaga already gone up a lot. Water play is the next one. Most people don't know about water tariff increase in Penang since 1/1/2023 for non-domestic and special categories users.

Details here:
https://pba.com.my/pdf/news/2022/29112022_PBAPP_NonDomesticTariff_ENG.pdf

5. Net cash of RM193m. It has cash RM213m, total debts RM20m. Just the net cash only already 58 sen per share!

Source:
https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=225389&name=EA_FR_ATTACHMENTS

Bonus reason no 6: its Book Value is RM2.88
Source:
https://www.bursamalaysia.com/bm/market_information/announcements/company_announcement/announcement_details?ann_id=3398547

5 reasons why PBA is worth RM2.50 (Part 1):

1. Turnaround story QoQ. Core earnings turnaround to RM26m profit from RM3m loss last quarter. Why? Because revenue increased while cost decline. Revenue up due to water tariff increase for certain users in Penang. Cost down due to the waiver of ICPT charges by TNB for Water Operators for the second half of the 2023.

2. Turnaround story YoY, PBT almost TRIPLED. Last year 3Q PBT was RM10m, this year RM29m. Why up? Revenue up due to water tariff increase for certain users in Penang. 3Q 2022 should look at PBT not net profit due to tax reversal distorting comparison.

3. So, exclude tax effect one year after the new tariff PBA should make RM104m or 32 sen. I use 8x PE to get RM2.56 round down RM2.50

(Part 2 continue later.,..)

HARTA is poised to surge due to reasons below:

1. Next quarter earnings will improve somemore as earnings rebound has just started. Why? Because HARTA is the most efficient glove players and they are going to use technology to become more cost efficient. They will close their old plant and deploy latest tech machines to make gloves at best cost and highest quality.

2. Foreigners have started buying HARTA.

3. Most brokers call SELL. This means all negativity already there. When one broker upgrade to Buy, then this stock will fly.

4. Technical chart looks good. It is above all Moving Averages. Long Term, Short Term,... u name it.

5. Price is still 50%-70% below pre-Covid level of RM4.50 to RM6.00. This is the only glove stocks that did not do bonus issue so it is an apple to apple comparison. Breaking RM2.30 is just the beginning.

6. Fengshui super good now - Yesterday price was up 19 sen and 8.88%. Wah super ONG number!

RHB sector update on property.

Top picks = UEMS + SUNWAY + AME ELITE

SUNWAY TP RM2.67, 45% Upside!

Maintain OVERWEIGHT. We are upbeat on the outcome of the recent
meeting between Malaysia and Singapore. Both governments have
committed to accelerate the progress of the Johor-Singapore Special
Economic Zone (SEZ), with further updates/details regarding tax incentives
and cross-border electricity trading expected to be announced in the coming
months. The leaders strongly emphasised the aim to smoother trips for
people and transportation of goods. Companies that can potentially benefit
significantly include UEM Sunrise, Sunway and AME Elite Consortium.

MoU to be signed on 11 Jan 2024. Both governments have announced
that an MoU on the SEZ is expected to be signed on 11 Jan 2024, as
officials on both sides are currently conducting a feasibility study on the SEZ
to determine interest from investors and market demand. We believe
developers with landbank near the border (causeway and the Tuas link)
should benefit given the focus on “ease of travelling of goods and people”.
The greater connectivity and industrial activities should lead to higher
demand for residential and commercial properties in the future.

Directors and owner keep on buying :


Name Details of Changes
Date Type No. of Shares Price
MR TAN POAY SENG 04-Oct-2023 Acquired 80,000 1.949
MR TAN POAY SENG 22-Sep-2023 Acquired 189,300 2.008
MR TAN POAY SENG 21-Sep-2023 Acquired 52,000 1.984
TAN SRI DATO' SERI TAN KOK PING 19-Sep-2023 Acquired 80,000 2.010
MR TAN POAY SENG 11-Sep-2023 Acquired 92,200 1.920
MR TAN POAY SENG 08-Sep-2023 Acquired 78,500 1.905
MR TAN POAY SENG 07-Sep-2023 Acquired 55,000 1.914
MR TAN POAY SENG 05-Sep-2023 Acquired 34,900 1.919
MR TAN POAY SENG 04-Sep-2023 Acquired 56,100 1.910
MR TAN POAY SENG 30-Aug-2023 Acquired 182,000 1.900
MR TAN POAY SENG 28-Aug-2023 Acquired 109,000 1.920

This company pays dividend every quarter:

11-Sep-2023 25-Sep-2023 DIVIDEND Interim Dividend RM 0.0280
26-Jun-2023 10-Jul-2023 DIVIDEND Fourth Interim Dividend RM 0.0250
08-Mar-2023 24-Mar-2023 DIVIDEND Third Interim Dividend RM 0.0200
12-Dec-2022 27-Dec-2022 DIVIDEND Second Interim Dividend RM 0.0230
12-Sep-2022 27-Sep-2022 DIVIDEND Interim Dividend RM 0.0220

Sunway will get back the RM64m deposit.
Share price before this issue surface was RM2.00-2.10 range

Penang Development Corp to fully refund Umech Land deposit

KUALA LUMPUR (Oct 24): Penang Development Corp (PDC) will be required to fully refund the deposit paid by Umech Land Sdn Bhd amounting to RM64.60 million following the termination of the joint development agreement (JDA) for the development of Batu Kawan Industrial Park 2 (BKIP2).

In a filing with Bursa Malaysia on Tuesday, Sunway Bhd confirmed that its 70%-owned subsidiary Umech Land received a notice of termination of the JDA from PDC last Friday.

"Pursuant to the notice of termination, the JDA shall be terminated on the expiry of 90 days from the date of the notice of termination," Sunway said, adding that PDC will fully refund the deposit within a period of 30 days from the date of termination of the JDA.

https://theedgemalaysia.com/node/687457

Remember the healthcare IPO plan which is planned for 2025 / 2026.

https://themalaysianreserve.com/2023/02/09/a-healthcare-giant-in-the-making/

Given Sunway Medical’s plans to have over 2,000 operational beds by 2025, we believe that the company, when listed at the right time, will easily achieve the valuations of its peers.

Sunway PE: 14x
KPJ: 24x
IHH: 25x

Singapore household electricity, gas bills to rise as tariffs go up in Q4

HOUSEHOLD electricity and gas bills are set to rise in the fourth quarter of 2023, following an increase in tariffs announced by state energy suppliers on Friday (Sep 29).

From Oct 1 to Dec 31, the electricity tariff before the 8 per cent goods and services tax (GST) will go up by an average of 3.7 per cent or 0.98 Singapore cent per kilowatt-hour (KWh) from the previous quarter. This means the electricity tariff before GST will increase to 28.7 cents per KWh from 27.74 cents.

For families residing in Housing and Development Board four-room flats, the average monthly electricity bill will rise by S$3.57 or 3.5 per cent before GST.

https://www.businesstimes.com.sg/singapore/singapore-household-electricity-gas-bills-rise-tariffs-go-q4

@dragon the source is Simplyy Wall St website, not from me.

For some reason I cannot paste the link here

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at YTL Power International Berhad (KLSE:YTLPOWR) so let's look a bit deeper.

Understanding Return On Capital Employed (ROCE)
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for YTL Power International Berhad, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.072 = RM3.7b ÷ (RM59b - RM8.2b) (Based on the trailing twelve months to June 2023).

Thus, YTL Power International Berhad has an ROCE of 7.2%. In absolute terms, that's a low return, but it's much better than the Integrated Utilities industry average of 5.2%.

View our latest analysis for YTL Power International Berhad

roce
KLSE:YTLPOWR Return on Capital Employed October 11th 2023
In the above chart we have measured YTL Power International Berhad's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering YTL Power International Berhad here for free.

What Does the ROCE Trend For YTL Power International Berhad Tell Us?
While in absolute terms it isn't a high ROCE, it's promising to see that it has been moving in the right direction. Over the last five years, returns on capital employed have risen substantially to 7.2%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 25%. So we're very much inspired by what we're seeing at YTL Power International Berhad thanks to its ability to profitably reinvest capital.

The Bottom Line
A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what YTL Power International Berhad has. Since the stock has returned a staggering 156% to shareholders over the last five years, it looks like investors are recognizing these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

The RTS and Coronation Square are major drivers of the Iskandar property market

KUALA LUMPUR: The Iskandar Malaysia real estate market is optimistic, owing to major developments in Johor and Singapore, particularly the Rapid Transit System (RTS) link.

The RTS link project is a four-kilometre-long railway shuttle link with two stations, one in Bukit Chagar, Johor Bahru, and one in Woodlands, Singapore.

The link will serve as a catalyst for the continued development of Johor Bahru and its surrounding areas. It will increase the value of property in southern Johor.

Malaysia Rapid Transit System Sdn Bhd is the developer and owner of the civil infrastructure for the RTS Link's Malaysian section, which is scheduled to open in 2026.

https://www.nst.com.my/property/2023/10/965751/rts-and-coronation-square-are-major-drivers-iskandar-property-market

IF there is one thing Malaysians take pride in (besides our endless food and racial unity) is definitely the healthcare system.

Based on a survey at research organisation Ipsos, Malaysia currently ranks third next to Switzerland and Singapore, ranking second and first respectively, for their reliable service.

It was reported that 68 per cent of Malaysians respondents said that they trusted the nation’s healthcare system to provide them with the best treatment, with widely accessible information.

https://www.thesundaily.my/style-life/going-viral/m-sian-pays-only-rm30-for-father-s-hospital-bill-praises-healthcare-system-HG11604773

RHB IB bullish on Iskandar Malaysia property market
It picks UEM Sunrise Bhd and Sunway Bhd as key players in the Johor real estate sector.

PETALING JAYA: RHB Investment Bank Research (RHB IB) feels optimistic on the Iskandar Malaysia real estate market, driven by major developments in Johor and Singapore, particularly the Rapid Transit System (RTS).

In a sector update today, the research house made the projection based on anticipated strong demand for projects located close to the RTS, and high spending power among Singaporeans.

It has maintained an “overweight” call on the real estate sector, identifying UEM Sunrise Bhd and Sunway Bhd as the major players in the Johor market.

https://www.freemalaysiatoday.com/category/business/2023/10/09/rhb-ib-bullish-on-iskandar-malaysia-property-market/

THE global healthcare rose significantly in the shadow of the 2020 pandemic, reaching an all-time high of US$9 trillion in 2020 or about 10.8 per cent of the global gross domestic product (GDP), according to the World Health Organisation (WHO).

This number continues to rise since 2020, and according to Kenanga Investment Bank Bhd’s research team (Kenanga Research), it is expected to reach a total of US$10 trillion by 2026, increasing from US$8.4 trillion in 2022, representing a compound annual growth rate of 3.5 per cent over a five-year period.

https://www.theborneopost.com/2023/10/08/strengthening-malaysias-healthcare-sector/

Positive catalysts for UEMS price today are:

1. Expectation for Budget 2024 (due on Friday)
2. Strong rebound in US market overnight
3. Feel good factor from BN win at Pelangai election - uncertainty removed for the next 4 years

TP 90 sen

Ipsos: Malaysians rank third highest globally for trust in healthcare system

KUALA LUMPUR, Oct 6 — Despite long wait times, Malaysians still have the highest confidence in the country’s healthcare system compared to the most of the world.

According to a study done by research firm Ipsos on healthcare systems, Malaysia is rated third after Switzerland and Singapore, which tops the list as second and first for their reliable service.


Based on the survey, 66 per cent of Malaysians rated the healthcare system to be good or very good in the country, while 71 per cent of Singaporeans and 68 per cent of Swiss feel the same about healthcare in their country.

https://www.malaymail.com/news/malaysia/2023/10/06/ipsos-malaysians-rank-third-highest-globally-for-trust-in-healthcare-system/94548

These catalysts will push UEMS price higher today:

1. BN win at Pelangai election
2. Strong US market increase on Friday night

TP 90 sen

Capital A delay PN17 upliftment submission so many times!

Shift to MESTRON for better future!
RHB report below.

MESTRON MK; Not Rated; Fair Value RM0.80

MYR0.80 FV, based on 27x EV/EBITDA, is in line with Mestron’s historical
mean and supported by the larger market capitalisation vs its closest peers
such as Lysaght Galvanised Steel (LYSA MK, NR) and Rohas Tecnic
(RTEC MK, NR) which trade at lower EV/EBITDA multiples. We believe the
premium is warranted given its leading position in the lighting pole industry,
the enviable FY22-25F core earnings CAGR of 32%, strong net cash
balance sheet and growing exposure to the renewable energy (RE)
segment which yields attractive EBITDA margin of >50%.

A leading local supplier of lighting poles. Mestron is the leading domestic
manufacturer and supplier of galvanised street lighting poles with a good
track record of executing key infrastructure and highway projects. The
revival of construction activities, renewed interest in the property sector as
well as government-led catalytic developments are expected to catalyse
demand for lighting poles. The group’s broader product mix (specialty and
decorative poles) and swift delivery timeline are a key competitive
advantage, in our view.

Riding on the coattails of JENDELA and 5G deployment. Mestron has
successfully delivered about 200 towers under Phase 1 of the National
Digital Infrastructure Plan (JENDELA) programme. We believe the group is
well positioned to capture additional site orders under Phase 2 with the
Government targeting 100% internet coverage by 2025. The ongoing 5G
deployment is an added bonus.

RE segment should drive new earnings leg up. Mestron has secured a
21-year Power Purchase Agreement (PPA) with TNB for its new 2.0MW
biogas plant which should contribute MYR6m and MYR2-3m in incremental
revenue and PAT under full capacity. The group is also involved in the Net
Energy Metering (NEM) and Self-Consumption (SelCo) schemes with
3.3MW in rated capacity capable of generating MYR1.8m pa in recurring
revenue from FY24F. We do not rule out Mestron securing further EPCC
jobs in the interim given the current tenderbook of c.MYR100m.

Earnings set to hit new highs. We project Mestron’s core earnings to grow
at a FY22-FY25F CAGR of 32%, premised on: i) The expansion of the RE
segment (maiden contribution from the biogas business in 2H23), ii) new
order wins for conventional and specialty poles under Phase 2 of JENDELA
and 5G network deployment, and iii) the recovery in the construction sector
which portends stronger orders from both the public and private sectors.

Key risks include lower-than-estimated earnings/margin, unexpected
delays, slowdown in the construction sector, and the spike in raw material
prices.

Top Glove so many quarter in loss. fundamentally worth the book value price of 59 sen.

Shift to MESTRON for better future!
RHB report below.

MESTRON MK; Not Rated; Fair Value RM0.80

MYR0.80 FV, based on 27x EV/EBITDA, is in line with Mestron’s historical
mean and supported by the larger market capitalisation vs its closest peers
such as Lysaght Galvanised Steel (LYSA MK, NR) and Rohas Tecnic
(RTEC MK, NR) which trade at lower EV/EBITDA multiples. We believe the
premium is warranted given its leading position in the lighting pole industry,
the enviable FY22-25F core earnings CAGR of 32%, strong net cash
balance sheet and growing exposure to the renewable energy (RE)
segment which yields attractive EBITDA margin of >50%.

A leading local supplier of lighting poles. Mestron is the leading domestic
manufacturer and supplier of galvanised street lighting poles with a good
track record of executing key infrastructure and highway projects. The
revival of construction activities, renewed interest in the property sector as
well as government-led catalytic developments are expected to catalyse
demand for lighting poles. The group’s broader product mix (specialty and
decorative poles) and swift delivery timeline are a key competitive
advantage, in our view.

Riding on the coattails of JENDELA and 5G deployment. Mestron has
successfully delivered about 200 towers under Phase 1 of the National
Digital Infrastructure Plan (JENDELA) programme. We believe the group is
well positioned to capture additional site orders under Phase 2 with the
Government targeting 100% internet coverage by 2025. The ongoing 5G
deployment is an added bonus.

RE segment should drive new earnings leg up. Mestron has secured a
21-year Power Purchase Agreement (PPA) with TNB for its new 2.0MW
biogas plant which should contribute MYR6m and MYR2-3m in incremental
revenue and PAT under full capacity. The group is also involved in the Net
Energy Metering (NEM) and Self-Consumption (SelCo) schemes with
3.3MW in rated capacity capable of generating MYR1.8m pa in recurring
revenue from FY24F. We do not rule out Mestron securing further EPCC
jobs in the interim given the current tenderbook of c.MYR100m.

Earnings set to hit new highs. We project Mestron’s core earnings to grow
at a FY22-FY25F CAGR of 32%, premised on: i) The expansion of the RE
segment (maiden contribution from the biogas business in 2H23), ii) new
order wins for conventional and specialty poles under Phase 2 of JENDELA
and 5G network deployment, and iii) the recovery in the construction sector
which portends stronger orders from both the public and private sectors.

Key risks include lower-than-estimated earnings/margin, unexpected
delays, slowdown in the construction sector, and the spike in raw material
prices.

Top Glove loss widened against last quarter, fundamentally worth the book value price of 59 sen.

Shift to MESTRON for better future!
RHB report below.

MESTRON MK; Not Rated; Fair Value RM0.80

MYR0.80 FV, based on 27x EV/EBITDA, is in line with Mestron’s historical
mean and supported by the larger market capitalisation vs its closest peers
such as Lysaght Galvanised Steel (LYSA MK, NR) and Rohas Tecnic
(RTEC MK, NR) which trade at lower EV/EBITDA multiples. We believe the
premium is warranted given its leading position in the lighting pole industry,
the enviable FY22-25F core earnings CAGR of 32%, strong net cash
balance sheet and growing exposure to the renewable energy (RE)
segment which yields attractive EBITDA margin of >50%.

A leading local supplier of lighting poles. Mestron is the leading domestic
manufacturer and supplier of galvanised street lighting poles with a good
track record of executing key infrastructure and highway projects. The
revival of construction activities, renewed interest in the property sector as
well as government-led catalytic developments are expected to catalyse
demand for lighting poles. The group’s broader product mix (specialty and
decorative poles) and swift delivery timeline are a key competitive
advantage, in our view.

Riding on the coattails of JENDELA and 5G deployment. Mestron has
successfully delivered about 200 towers under Phase 1 of the National
Digital Infrastructure Plan (JENDELA) programme. We believe the group is
well positioned to capture additional site orders under Phase 2 with the
Government targeting 100% internet coverage by 2025. The ongoing 5G
deployment is an added bonus.

RE segment should drive new earnings leg up. Mestron has secured a
21-year Power Purchase Agreement (PPA) with TNB for its new 2.0MW
biogas plant which should contribute MYR6m and MYR2-3m in incremental
revenue and PAT under full capacity. The group is also involved in the Net
Energy Metering (NEM) and Self-Consumption (SelCo) schemes with
3.3MW in rated capacity capable of generating MYR1.8m pa in recurring
revenue from FY24F. We do not rule out Mestron securing further EPCC
jobs in the interim given the current tenderbook of c.MYR100m.

Earnings set to hit new highs. We project Mestron’s core earnings to grow
at a FY22-FY25F CAGR of 32%, premised on: i) The expansion of the RE
segment (maiden contribution from the biogas business in 2H23), ii) new
order wins for conventional and specialty poles under Phase 2 of JENDELA
and 5G network deployment, and iii) the recovery in the construction sector
which portends stronger orders from both the public and private sectors.

Key risks include lower-than-estimated earnings/margin, unexpected
delays, slowdown in the construction sector, and the spike in raw material
prices.