Kelington Group Bud (KGB)'s outlook remains promising, supported by a robust order book primarily consisting of high-margin projects.

The Semiconductor Industry Association (SEMI) expects 103 new fabs worldwide to come online between 2023 and 2027, including eight in Southeast Asia, driven by production capacity expansions to support AI proliferation and other disruptive technologies.

As a reputable infrastructure contractor, KGB is set to be a key beneficiary in the region in 2024 and beyond.

Recently, the group secured additional ultra-high purity (UHP) gas contracts worth RM413m, mostly from Malaysia and Singapore, bringing its YTD secured contract value to RM977m as of early September.

Its tender book remains significant dominated by potential jobs from Singapore, China, Germany.

According to Kenanga, KGB's Liquid carbon dioxide (LCO2) plants, with a combined capacity of 120,000 MT, are now operating at about 58% capacity, up from about 40% in 1QFY24. The utilisation rate is expected to rise due to increased demand from neighbouring countries experiencing permanent LCO2 shortages as a result of decarbonisation efforts.

Besides, its 10-year contract to supply hydrogen, nitrogen, and oxygen to an optoelectronics semiconductor giant in Kulim, Kedah, has began contributing in 2QFY24 and will continue until 2QFY34.

The company has strong earnings visibility and solid foothold in multiple markets including Malaysia, Singapore and China.