KUALA LUMPUR: Kelington Group Bhd year to date new order wins of RM146mil falls within Affin Hwang Capital research's expectations for the current financial year.
The group announced yesterday that it had secured new Chinese ultra high purity (UHP) contracts worth a combined RM53mil, largely for specialised engineering work for water fabs in China.
With the addition of these new contracts, the group's outstanding order book comes to RM406mil with the majority coming from the UHP segment at 73%, followed by process engineering at 19% and general contracting at 7%.
"It comes as no surprise that KGB emphasizes its UHP segment as management continues to focus on the high-margin segment and generating strong project flows beyond the domestic market," said Affin Hwang.
The research house said the job wins are testimony to Kelington's strength in the UHP segment across its key operating markets and amid tense competition.
It added that its expects Kelington's growth trajectory to be sustainable with the impending commencement of the liquid C02 plant in 3Q19.
"We reaffirm our BUY call on KGB and 12-month target price of RM1.60, based on a 16x PER applied to our 2019E EPS."
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