KUALA LUMPUR: Shares of Mesiniaga Bhd
rose to a fresh multi-year high of RM1.78 on Thursday as investors chased the IT-services stock after it secured a RM1.9bil contract from Xiddig Cellular Communications Sdn Bhd.
At 10.11am, it was up 17 sen to RM1.78 with 176,800 shares done. The FBM KLCI was up 3.06 points to 1,686.67.
The contract, which was awarded on Jan 18, and ends on March 31, 2020. Since then, the share price has jumped by 54.7% from RM1.17 to RM1.78.
At the current share price, its market capitalisation is RM103.28mil based on the paid-up of 60.40 million shares.
The contract had put Mesiniaga under investors’ radar. It is part of the RM5.45bil Enhanced Malaysia International Internet Gateway (EM-IIG) high-speed broadband project, developed by Xiddig.
Mesiniaga, which is 18.77%-owned by Permodalan Nasional Bhd, will undertake the commissioning of the core, metro distribution and access network for the EM-IIG project. The contract is effective from Jan 18, 2019 to March 31, 2020.
On Jan 26, group chairman and chief executive officer Datuk Wan Mohamed Fusil Wan Mahmood told StarBizWeek that Mesiniaga has done its due diligence on Xiddig and its business plan, prior to bidding for the project.
“We are satisfied with Xiddig’s capabilities. The Contract and payment milestone have been agreed upon and are fair to both parties,” Wan Mohamed Fusil said.
The contract from Xiddig will easily be Mesiniaga’s biggest revenue contributor over the next 15 months and will likely raise the group’s turnaround by multiple times.
Mesiniaga is an enterprise solutions integrator focused on turnkey projects that requires specialised information technology skills and project management.
At the same time, its business is sustained by recurring multi-year maintenance and services contracts.
As of Sept 30, 2018, Mesiniaga is in a net cash position of RM16.9mil. Its cash and cash equivalents are worth RM31.05mil, against total borrowings of RM14.14mil.