Galaxy International: Yongda Group is also a data center concept stock, which encouraged the stock to rise 14%

According to a report released by Galaxy International Securities today, recent investments in several water projects, including the Xuzhou Rasau (Rasau) Water Supply Plan, the Lengyue 2 Water Treatment Station Project, and the Perak - Penang Water Supply Plan, are all beneficial to Yongda Group.

Meanwhile, as a data center hub for the regional market, the group completed a contract with a total value of RM7 million related to the data center.

“We believe such contracts are coming one after another!”

In addition, local infrastructure projects are expected to accelerate in the second half of 2024, thereby boosting demand for low-carbon steel, and Yongda Group will benefit accordingly.

Furthermore, the active construction sector will drive demand for metal wire mesh. This product is also the largest revenue contributor to Yongda Group's manufacturing business (accounting for 40% of FY2023).

Supported by many favorable factors, analysts expect Yongda Group's performance in the next quarter to achieve strong year-on-year growth in a low environment.

As a result, Galaxy International drastically raised its profit forecast for the group. Following this, the target price was also raised to RM1.70, and the rating “increased.”

Yongda Group was also greatly encouraged today, surging as much as 16 cents this morning, or 13.91% to RM1.31.

As of 4 p.m., the stock was reported at RM1.30, up 15 cents, or 13.04%.

It is worth mentioning that the group earlier proposed to distribute bonus shares at a ratio of 4 to 3, and the bonus distribution plan will be eliminated next Thursday (8th).

After the announcement of the distribution of bonus shares, the stock price has already experienced a wave of strong increases. So far this year, the stock has risen close to 70%.