PETALING JAYA: Satang Jaya Bhd was the second most actively stock traded on Bursa Malaysia yesterday on speculative interest that the defence contractor would be bagging more contracts.
The promise of contracts is not only limited to the Armed Forces, but also the oil and gas industry, as Satang Jaya aims to become an accredited supplier to Petroliam Nasional Bhd (Petronas).
“The company is pitching to be an equipment supplier to the oil and gas industry but it first needs to become a Petronas contractor,” said an analyst.
Satang Jaya shares remained in the top 30 most active list in recent weeks and yesterday, interest in the stock gained momentum as it put on 3 sen to RM1.65 on 16.75 million shares traded.
Revenue and profit have grown and on an annualised basis, the company is projected to earn 15.64 sen per share for the 52 weeks ending June 30. On March 3, Satang Jaya changed its financial year to end September.
Last August, the ceiling of Satang Jaya's contract with the Defence Ministry was raised by RM102mil to RM190mil.
The company, which made its name as a contractor to the Air Force, recently bagged a five-year RM152mil deal with the Government for supply of its safety and survival equipment.
In the defence industry, companies with a reliable track record are often rewarded with bigger jobs.
The new contract comes amid the company's intention to spread its business to other branches of the Armed Forces and also to commercial airline operations.
Satang Jaya is also said to be keenly looking at contracts from the Navy, which would see it providing services related to not only its safety and survival equipment business, but also fire protection systems and armaments.
Satang Jaya, which is a consultant to 30 specialised original equipment manufacturers, has the ability to service missiles and other weapon systems. Apart from the Air Force, the Navy also has a big arsenal of missiles.
While the Armed Forces accounts for 90% of Satang Jaya’s revenue, the company is eyeing the oil and gas sector for its safety and fire equipment.
Getting accreditation from Petronas would automatically enable the company to pitch its services to other oil majors in Malaysia and if it succeeds, this would greatly diversify its revenue stream.
Satang Jaya is also aiming to grow its environmental management business, where it provides consultancy on solid waste management and disposal.