Glowing prospects for Glostrext boosts share price

Glostrext Bhd is making good strides since its listing on the ACE Market last August. The geotechnical instrumentation service provider is likely to stage a a stronger recovery from its consolidation phase.

The counter should see support level at 23 sen with immediate resistance level at 26.5 sen be broken with renewed buying interest. It may continue to lift price higher to subsequent resistance level of 29 sen.

Glostrext performed very well on its listing day, touching a high of 65 sen from its IPO price of 19 sen. After much profit taking, the counter closed at 25.5 sen or a 32% premium on its maiden trading day.

Interest in the smallish counter may stem from its exposure in the country’s booming construction industry. The company may be new on Bursa Malaysia but it has a long history in the construction space.

It was established in 1992 with its first major job providing pile instrumentation services for the construction of Petronas Twin Towers. The company also provided structural and ground instrumentation and monitoring services for the construction of a hotel and car park building in Genting Highlands. Its business is just not in Malaysia as it has expanded to other countries as well.

In 2021, Glostrext bagged its first job in Cambodia providing pile static load test services for the construction of Naga 3 Integrated Entertainment Complex in Phnom Penh.

For the financial year ended Mar 31, 2024, the company posted a net profit of RM1.48 million on the back of RM25.5 million revenue. There were no comparison numbers. It said Singapore was the group’s largest market, accounting for 74.9% of the Group’s revenue in the 4QFY24.

However, its revenue decreased 24.2% to RM6 million as compared to RM8 million for the immediate preceding quarter. This was mainly due to a lower number of service engagements from the provision of pile instrumentation and static load test services during the current financial quarter under review.

Last October, Glostrext bought a 1,735-sq-ft office space in Singapore for S$750,000 (RM2.61 million).

Glostrext Singapore currently owns two units of properties in the same building, which are #06-09 30 Kaki Bukit Road, Empire Techno Centre (office) and #01-02 30 Kaki Bukit Road, Empire Techno Centre (warehouse on ground floor). With clients in Singapore, it makes sense to grow its presence in Singapore and broaden its services there.

This strategic move aligns with Singapore's Building Control Regulation of 2003, which mandates structural and ground instrumentation as well as monitoring for all construction of buildings and infrastructure in Singapore effective 2008.

Glostrext specialised services in the construction sector makes it an attractive counter given the expected increase in public and private spending on infrastructure development in Singapore and Malaysia.

This will naturally drive the growth of the geotechnical instrumentation and monitoring market as well as the share price of the company.