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BusinessToday
05-08-2025
- Business
- BusinessToday
Kelington Poised For Share Price Re-Rating After Major European Win
RHB Investment Bank Bhd (RHB Research) has maintained a BUY call on Kelington Group with a revised target price of RM5.40 from RM4.30, representing a 28.6% upside and a dividend yield of about 3%. The research house said its valuation includes a 6% ESG premium, based on 26 times FY2026 forward earnings, in line with the historical KLTEC mean. The upgrade follows Kelington's receipt of a Letter of Intent for a maiden semiconductor hook-up contract in Dresden, Germany, worth up to €50 million (RM244 million). According to RHB Research, this marks the group's first foothold in Europe and is expected to catalyse further share price re-rating, supported by the improving risk-reward profile in the global chip sector. It added that new order wins could surpass the FY2022 record, with the latest European contract pushing year-to-date wins to about RM800 million against RM390 million in the first quarter. The Letter of Intent covers pricing structures and adjustment clauses effective until 2027, paving the way for a full contract with Kelington's existing European client. The initial phase of the project is valued at a minimum of €30 million (RM146 million), potentially rising to €50 million over two years, with further opportunities beyond that. RHB Research said the development is significant as part of Kelington's RM2.5 billion European tender book as of end-May. Looking ahead, the firm expects more positive news flow as additional tender results emerge by the third and fourth quarters, potentially lifting FY2025 order replenishments beyond the RM1.1 billion recorded in FY2024 and its earlier RM1.26 billion estimate. It has raised its FY2025 order book replenishment forecast to RM1.8 billion, leaving FY2026 and FY2027 projections unchanged. This adjustment increases core earnings forecasts by 11%, 12.7% and 4.5% for FY2025-2027, respectively. Among pending bids are a joint venture involving Taiwan's largest foundry for a new German fabrication plant valued at RM1.5 billion and a RM292 million fab tender in India. The company's tender book of over RM5 billion should sustain operations well into FY2027, the research house noted. For the upcoming second-quarter results due on 21 August, RHB Research expects Kelington to outperform its own and market estimates, forecasting revenue growth of 20%-25% quarter-on-quarter and core profit after tax and minority interest in the RM30 million to RM34 million range, up from RM26.6 million in the first quarter. Advanced engineering remains the main growth driver, contributing significantly to Kelington's RM1.43 billion outstanding order book as at March. Meanwhile, its industrial gas segment is projected to deliver a 23% revenue compound annual growth rate for FY2025-FY2027, supported by higher liquid carbon dioxide demand and a new on-site gas supply deal with an opto-electronics client in Kedah.
The Star
01-08-2025
- Business
- The Star
FBM KLCI leaps 1.33%, bucking regional losses after US tariff cut
KUALA LUMPUR: Bursa Malaysia closed higher on Friday, bucking regional trends, as investor sentiment improved following the US decision to cut tariffs on Malaysian exports to 19% and the unveiling of the 13th Malaysia Plan. The FBM KLCI surged 20.10 points, or 1.33%, to close at 1,533.35, after trading between a high of 1,534.48 and a low of 1,519.17. Today's gain marks the strongest performance since its 2.32% jump on May 13. However, the index was little changed over the week. On Bursa Malaysia, there were 570 gainers, 452 losers, and 521 counters traded unchanged. A total of 3.16 billion shares, valued at RM2.22bil, changed hands. Gamuda contributed the most to the index's gain and recorded the largest move, rising 4.25%, or 22 sen, to RM5.40. Other gainers included Tenaga Nasional, which rose 28 sen to RM13.30, and CIMB, which added 24 sen to RM6.79. PETRONAS Chemicals was the biggest drag on the index, falling 2.06%, or eight sen, to RM3.80. On the broader market, Ajinomoto rose 22 sen to RM13.08, Malaysian Pacific Industries added 20 sen to RM20.34, while Heineken slipped 34 sen to RM23.50 and Mesiniaga lost 16 sen to RM1.30. Newly listed UMS Integration jumped 50 sen to RM5.50 with 6.12 million shares traded. According to data from Bursa Malaysia, foreign investors offloaded RM85mil worth of local equities on Thursday. Meanwhile, local institutions and retailers were net buyers, picking up RM50mil and RM36mil worth of shares, respectively. On the forex market, the ringgit slipped 0.23% against the US dollar to 4.2790. It also weakened 0.14% against the Singapore dollar to 3.2964, fell 0.07% against the pound sterling to 5.6464, and declined 0.09% versus the euro to 4.8856. Key regional markets ended the day lower, including: Japan's Nikkei 225 closed down 0.66% to 40,799.60; Hong Kong's Hang Seng Index fell 1.07% to 24,507.81; China's CSI300 Index declined 0.51% to 4,054.93; Taiwan's Taiex gave up 0.46% to 23,434.38; South Korea's Kospi finished down 3.88% to 3,119.41 and; Singapore's Straits Times Index fell 0.48% to 4,153.83 points.
