Newly listed UUE Holdings likely to see further upside

UUE Holdings Bhd has been one of the star performer on its maiden day of listing. The underground utilities engineering solutions provider, which was listed on July 2, this year, made a strong debut on the ACE Market.

UUE raised a total of RM29.98mil through the public issue of 124.9 million new ordinary shares. About 52.5% or RM15.75mil of the proceeds will be used for the purchase of machinery and equipment, and with 36.3% or RM10.89mil channelled for the working capital.

It plans to acquire more machinery to expand its range of underground utilities engineering solutions and the scale of its projects. This includes acquiring a maxi rig horizontal directional drilling (HDD) machine to venture into subsea HDD works, broadening its service offerings.

UUE currently owns 18 HDD machines — to drill tunnels for the laying of underground pipes — all of which are midi rigs. The company is also committed to further expanding its services by actively participating in tenders for electricity distribution projects in Singapore. UUE, which specialises in the HDD method of laying pipes, saw a steady growth in its Singapore market.

The market contributed about 26% or RM23 million to its revenue for the financial year ended Dec 31, 2023 (FY2023). The demand for underground utilities engineering solutions is driven by Singapore’s plans to increase its population to between 6.5 million and 6.9 million by 2030.

Besides Singapore, UUE also plans to expand its operations in Malaysia, focusing on Terengganu, Kelantan and Pahang by bidding for projects related to telecommunications and electricity supply.

UUE’s current and past completed underground utility engineering projects are mainly in Johor, Negeri Sembilan, Melaka and Selangor. The newly listed company is showing a lot potential for further upside backed by its good prospects.