Kenanga Research said the new contract would add to the group’s current outstanding order book of RM1.5bil.
PETALING JAYA: Kenanga Research is optimistic about Kelington Group Bhd
’s (KGB) latest contract win worth RM143mil from China’s largest semiconductor foundry, describing it as a strong start towards achieving the research house’s targeted RM1bil order replenishment for 2024.
The research house said the new contract would be added to the group’s existing RM1.5bil outstanding order book, while its tender book remained elevated at more than RM2.1bil.
The robust tender pipeline is in line with US-based Semiconductor Equipment Manufacturers Industry’s (SEMI) forecast of a 12% recovery in 2024, followed by a substantial 24% upcycle in 2025, the brokerage added.
SEMI represents companies in the electronics manufacturing and design supply chain business.
“We continue to reiterate KGB as one of our top picks for the sector, given its ability to consistently deliver strong earnings as it approaches the next semiconductor wave,” Kenanga Research said.
In a filing with Bursa Malaysia, the company said it had been awarded a contract worth RM143mil from China’s largest semiconductor foundry to perform design, procurement, construction and commissioning of gas hookup systems in Shanghai.
The company said the job would start this month and is expected to be completed by January 2026.
The research house, which is maintaining its “outperform” call on the company with a target price of RM3.28, said it liked KGB for it being a proxy to the front-end wafer fab expansion.
The company, which has a presence in multiple markets such as Malaysia, Singapore and China, also has strong earnings visibility underpinned by robust order book and tender book exceeding RM1bil.
