RHB Research optimistic about Kelington Group's industrial gas growth potential
KUALA LUMPUR: RHB Investment Bank Bhd (RHB Research) said it remains optimistic about Kelington Group Bhd's industrial gas (IG) business growth potential with increasing demands from Oceania, Africa, and Indonesian markets.
The bank noted that while its ultra-high purity (UHP) projects continue to be the company's mainstay at 70 per cent of revenue, the IG segment is now the second largest contributor at 13 per cent.
"This outpaced the general contracting (GC) at 11 per cent. GC and process engineering (PE) revenues fell 70 per cent and 36 per cent year-on-year (YoY), primarily as the Sarawak plant expansion and the tank pit project have reached the peak of their S-curves," it said.
RHB Research noted that the commencement of Kelington's second liquid carbon dioxide (LCO2) plant in March boosted annual production capacity to 120k tonnes (from 50k tonnes), with further margin expansion.
The bank also added that Kelington's e-orders are expected to keep the group busy over the next 12 months and consist of UHP projects (74 per cent), followed by PE (13 per cent) and GC projects (12 per cent)
"Year-to-date September 2024 new job wins stood at RM1 billion, including UHP jobs from China and a newly secured PE contract in Malaysia valued at RM100 million.
"We see the extension of the US protectionist policies under the incoming Trump administration benefiting Kelington's with the aggressive expansion of the domestic fab capacity in China set to continue," it added.
RHB Research said it keeps Kelington's financial year 2024 to financial year 2026 (FY24-FY26) earnings and target price pending its results briefing.
https://www.nst.com.my/business/corporate/2024/11/1133745/rhb-research-optimistic-about-kelington-groups-industrial-gas
The bank noted that while its ultra-high purity (UHP) projects continue to be the company's mainstay at 70 per cent of revenue, the IG segment is now the second largest contributor at 13 per cent.
"This outpaced the general contracting (GC) at 11 per cent. GC and process engineering (PE) revenues fell 70 per cent and 36 per cent year-on-year (YoY), primarily as the Sarawak plant expansion and the tank pit project have reached the peak of their S-curves," it said.
RHB Research noted that the commencement of Kelington's second liquid carbon dioxide (LCO2) plant in March boosted annual production capacity to 120k tonnes (from 50k tonnes), with further margin expansion.
The bank also added that Kelington's e-orders are expected to keep the group busy over the next 12 months and consist of UHP projects (74 per cent), followed by PE (13 per cent) and GC projects (12 per cent)
"Year-to-date September 2024 new job wins stood at RM1 billion, including UHP jobs from China and a newly secured PE contract in Malaysia valued at RM100 million.
"We see the extension of the US protectionist policies under the incoming Trump administration benefiting Kelington's with the aggressive expansion of the domestic fab capacity in China set to continue," it added.
RHB Research said it keeps Kelington's financial year 2024 to financial year 2026 (FY24-FY26) earnings and target price pending its results briefing.
https://www.nst.com.my/business/corporate/2024/11/1133745/rhb-research-optimistic-about-kelington-groups-industrial-gas
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