PETALING JAYA: AWC Bhd
is poised for improvement in earnings for financial year 2024 (FY24) as it is a good proxy, among others, to rising environmentalism, particularly, among corporations.
Kenanga Research said the company is at the forefront of automated waste management and green building services, including energy management and rainwater harvesting.
The brokerage said AWC is poised for a step-up in earnings in FY24 after having plugged the earnings leakages from key earnings contributor Stream Group, adding that it projects FY24 net profit to surge to RM19.9mil from RM2.1mil a year ago.
“We project its FY25 net profit to grow 26%, driven mainly by the full-year impact of the full ownership of Stream Group.
“Overall, its current outstanding order book of RM766.8mil should keep it busy for the next two to three years,” it said.
In December 2023, AWC bought out Stream Group’s 49% minority shareholder for RM110mil. In terms of prospects, it said apart from rising environmentalism locally, the group also sees opportunities in new smart and green mega city development projects in Nusantara, Indonesia and Neom, Saudi Arabia.
For its facility division, the company is also confident of securing at least 10% of 150 public hospital support services concessions up for renewal and retendering in March 2025.
Its rail division’s current order backlog of RM74.1mil order book, largely awarded by Keretapi Tanah Melayu Bhd and MRT Corp, should rise in tandem with the roll-out of Penang Mutiara LRT Line and MRT3, resulting in higher demand for track materials, the brokerage said.
Meanwhile, Kenanga Research said earnings for AWC’s engineering division are expected to be resilient on the back of its current RM92.3mil outstanding order book, as well as the revival of property and construction projects locally.
AWC provides engineering services such as electrical distribution, lighting, air-conditioning and security, building controls, engineering components, and systems, as well as waste collection services.
The group is operating in four business segments, namely environment, engineering, facilities and rail.
