$STRAITS / 0080 (STRAITS INTER LOGISTICS BERHAD)
Research by TA
Not Rated - FV of RM0.20

"Rerating Catalyst from Diversification"

The search for hidden gem in the local bourse has never been an easy task.
STRAITS stands out on our investment radar when the company announced its intention to diversify into the telecommunication business.

Following our recent engagement with the management, we are convinced that telecommunication segment will be a significant growth driver for the group in the future. We expect the earnings potential to be huge, evidenced by the group’s ability to secure an orderbook of c.RM160mn. Meanwhile, the group’s core oil bunkering business is a beneficiary of the escalation in the Red Sea crisis and should remain stable in coming years. We value STRAITS at RM0.20/share, based on SOP valuation (Not Rated). We believe our valuation is fair considering the growth potential of its telecommunication
segment in line with 4G/5G rollout and the increasing adoption of digitalisation across various industries.

Analyst:
Ong Tze Hern
thong@ta.com.my