Engtex Group Berhad

The National Water Services Commission (SPAN) has emphasized that water resource availability is likely to be a significant constraint in supporting the rapid expansion of data centers in the country.

It seems unlikely that the inflow of foreign technology companies setting up data centers will be halted. Considering the government's high debt levels, foreign direct investment represents a crucial "free" flow of funds to stimulate our national economy, which is urgently needed.

Could it be that the government will mandate the reinforcement or construction of new water treatment plants to address this issue?

Which public-listed companies, in your view, stand to benefit from such developments?

My uneducated suspects:

$PBA / 5041 (PBA HOLDINGS BHD) $ENGTEX / 5056 (ENGTEX GROUP BERHAD) $RANHILL / 5272 (RANHILL UTILITIES BERHAD)

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by CGSI

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by KENANGA

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by Kenanga
Outperform - TP RM0.81

"Bracing For Water Piping Boom"

ENGTEX’s 1HFY24 results disappointed. This was no thanks to weak sales in 2QFY24 compounded by higher-cost inventory that
reared its ugly head again in the quarter. We cut our FY24F earnings by 31% but still expecting a stronger showing in 2HFY24 as the recent water tariff hikes allow water operators to kick start the long overdue water projects including pipe replacement. The sentiment towards water-related stocks has improved, and we keep our TP of RM0.81 which commensurate with previous up-cycle valuations, and leave our OUTPERFORM call unchanged.

Analyst:
Nigel Ng
nigel@kenanga.com.my

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by CGS
ADD – TP RM1.70
"A pipeline of projects to boost orderbook”

■ We raise FY24F-26F EPS, and upgrade our rating to Add with TP of RM1.70.
■ Nationwide pipe replacement cycle, rollout of local infrastructure projects and
water supply schemes, and data centre buildouts are key re-rating catalysts.
■ Earnings delivery improving; venture into Sarawak opens up a new market.

Analyst:
CHONG Tjen-San, CFA
tjen-san.chong@cgsi.com

Here’s part 3 of the non-exhaustive, ever-growing list of companies who has filed for IPO this year 2024 😊

11. Swift Energy Technology Bhd
- ACE Market
- sells industrial automation and power systems
- mainly focuses on process control, photovoltaic, power distribution and - other systems mainly servicing customers in oil and gas, as well as grain products, edible oils and food manufacturing industries.
- plans to install a mezzanine level within our existing fabrication facility and construct a new 3-storey fabrication facility in the area within the compound of our existing head office and fabrication facility
- earmarked part of the proceeds to finance the purchase of equipment and software by 2027 as well as set up a research-and-development centre. Further, Swift Energy also plans to expand in Indonesia by setting up a wholly-owned subsidiary with an office in Jakarta
- M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO.
14 May 2024 - https://cutt.ly/DejTWo6t


12. Cropmate Bhd
- ACE Market
- Fertilizer company, Cropmate formulates and blends conventional and specialty fertilisers, as well as trades straight fertilisers and related products.
- raise funds, including to part finance the acquisition of two factories for nearly RM30 million… “Part of our plans is to acquire our existing factories from a related party and directors”, as well as part of the proceeds for capital expenditure, including for new commercial vehicles and industrial equipment, as well as for the setting up of a research and development (R&D) and test laboratory.
- Hong Leong Investment Bank is the principal adviser, sponsor, underwriter and bookrunner for the IPO.
27 May 2024 - https://cutt.ly/tejTWpb4


13. Metro Healthcare Bhd
- LEAP Market transfer listing to ACE Market
- specialises in providing fertility and other obstetrics and gynaecology services
- it plans to acquire additional maternity hospitals to grow at a faster rate.
- MIDF Amanah Investment Bank is the IPO’s principal adviser, sponsor, underwriter and placement agent.
28 May 2024 - https://cutt.ly/6ejTWpCZ

14. Oriental Kopi Holdings Bhd
- ACE Market
- currently has about 14 cafes under the Oriental Kopi brand in shopping malls, shoplots and airport retail malls throughout Malaysia. The company also sells in-store packaged coffee and tea, as well as other food such as spreads, pastries, instant noodles, and seasonal items such as moon cakes.
- The company secured its first order for the export in February to Hong Kong, and signed a joint venture agreement with Paradise Group to expand its Oriental Kopi cafe into Singapore.
To support the expansion, Oriental Kopi plans to set up of a new central kitchen. The cafes will only carry out minimal final preparation, cooking and plating to complete the dish, ready to be consumed in the cafes, it said.
Further, Oriental Kopi wants to add four specialty retail stores between 2025 and 2026, as part of expansion of its consumer-branded packaged foods segment. The company currently only has one retail store in Johor.
- propose to set up a total of 15 new owned-operated cafes progressively between 2024 and 2026 in various states
- Alliance Islamic Bank is the IPO’s principal adviser, sponsor, sole underwriter and placement agent.
24 Jun 2024 - https://cutt.ly/3ejTWar6

15. Northern Solar Holdings Bhd
- ACE Market
- installs solar panels and operates solar farms
- mainly provides engineering, procurement, construction and commissioning of photovoltaics systems. The company also owns and operates 10 solar PV systems and another four solar PV systems under its 20%-owned Engtex Energy Sdn Bhd. Pipe and valve maker Engtex Group Bhd ($ENGTEX / 5056 (ENGTEX GROUP BERHAD)) owns 80% of Engtex Energy.
- $LAGENDA / 7179 (LAGENDA PROPERTIES BERHAD) has a 15% stake in Northern Solar.
- M&A Securities is the IPO’s adviser, sponsor, underwriter and placement agent.
26 Jun 2024 - https://cutt.ly/jejTWacn

There's more coming... part 4 to be released soon
😂

KENANGA 2H 2024 TOP PICKS SMALL CAP

$OPPSTAR / 0275 (OPPSTAR BERHAD) $KAREX / 5247 (KAREX BERHAD) $TGUAN / 7034 (THONG GUAN INDUSTRIES BERHAD) $MKH / 6114 (MKH BERHAD) $ENGTEX / 5056 (ENGTEX GROUP BERHAD)

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED BONUS ISSUE OF UP TO 414,303,807 NEW ORDINARY SHARES IN ENGTEX GROUP BERHAD ("ENGTEX" OR THE "COMPANY") ("BONUS SHARE(S)") ON THE BASIS OF 3 BONUS SHARES FOR EVERY 4 EXISTING ORDINARY SHARES IN ENGTEX HELD BY THE SHAREHOLDERS OF ENGTEX WHOSE NAMES APPEAR IN THE COMPANY'S RECORD OF DEPOSITORS ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER

General Meetings: Notice of Meeting

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
$LAGENDA / 7179 (LAGENDA PROPERTIES BERHAD)

OTHERSACQUISITION OF 100% EQUITY INTEREST IN VARIGLOBAL SDN. BHD. BY ENGTEX GROUP BERHAD

OTHERSACQUISITION OF 100% EQUITY INTEREST IN VARIGLOBAL SDN. BHD. BY ENGTEX GROUP BERHAD

NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : BONUS ISSUESENGTEX GROUP BERHAD ("ENGTEX" OR THE "COMPANY")

PROPOSED BONUS ISSUE OF SHARES

Notice of Sale or Cancellation of Treasury Shares (Section 127 of CA 2016)

BUILDING MATERIAL
$PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD) $ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by Kenanga
Overweight

“1QCY24 Report Card: Metal and Water Turn Auspicious”

We upgrade our sector call to OVERWEIGHT (from NEUTRAL), anchored by our recent upgrade of sector heavyweight PMETAL (OP; TP: RM6.35) to OUTPERFORM from MARKET PERFORM. There was a significant improvement in earnings delivery (against our expectations) by the sector in the recently concluded 1QCY24 reporting season with stocks under our coverage either beating or meeting our forecasts. We expect aluminium prices to stay firm on supply constraints while stable steel prices translate to stable steel product prices, reducing earnings volatility of steep product producers. Water pipe makers are poised for an exciting time ahead on the revival of water projects. Our sector top picks are PMETAL and ENGTEX (OP; TP: RM1.41)

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my
Nigel Ng
nigel@kenanga.com.my

NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : BONUS ISSUESENGTEX GROUP BERHAD ("ENGTEX" OR THE "COMPANY")

PROPOSED BONUS ISSUE OF SHARES

Immediate Announcement of Changes in Treasury Shares

Immediate Announcement of Changes in Treasury Shares (Amended Announcement)

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by Kenanga
Outperform – TP of MYR 1.41

“Proposed 3-for-4 Bonus Issue”

ENGTEX has proposed a 3-for-4 bonus share issue. We are neutral on the exercise. It is poised to benefit from the revival of water projects and improved steel product prices. We maintain our forecasts and TP of RM1.41 with OUTPERFORM call. Our TP will be adjusted to RM0.81 post the exercise.

Analyst(s):
Nigel Ng
nigel@kenanga.com.my

PETALING JAYA: Engtex Group Bhd is set to leverage on the revival of water projects backed by the better finances of water operators following the recent tariff hikes.

Immediate Announcement of Changes in Treasury Shares

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by Kenanga
Outperform - TP RM1.41

"Proposed 3-for-4 Bonus Issue"

ENGTEX has proposed a 3-for-4 bonus share issue. We are neutral on the exercise. It is poised to benefit from the revival of water projects and improved steel product prices. We maintain our forecasts and TP of RM1.41 with OUTPERFORM call. Our TP will be adjusted to RM0.81 post the exercise.

Analyst:
Nigel Ng
nigel@kenanga.com.my

Titan Weekend Chart Reviews

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)

Had been trending upwards here over the past month since forming its support around the RM 0.985 - RM 1 regions.

For now looking quite healthy and as long as able to hold above its RM 1.09+ immediate support, could continue on towards and beyond the RM 1.20+ regions.

Support: RM 1.09, RM 1.05 areas
Resistance: RM 1.15, RM 1.20, RM 1.23 areas

NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : BONUS ISSUESENGTEX GROUP BERHAD ("ENGTEX" OR THE "COMPANY")

PROPOSED BONUS ISSUE OF SHARES

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR NG CHOOI GUAN

$ENGTEX / 5056 (ENGTEX GROUP BERHAD)
Research by CGS
Hold – TP RM1.14

“1Q24 in line; order pipeline remains robust"

■ 1Q24 core net profit of RM9.4m was within expectations, at 25.4% of our FY24F estimate. Higher steel prices benefited Engtex’s margins.
■ We make minor adjustments to our FY24-26F estimates as we incorporate Engtex’ 2023 audited figures, but keep key assumptions largely unchanged.
■ Downgrade to Hold on strong share price performance YTD. We raise our GGM-derived TP slightly to RM1.14, employing a 6.4% FY25 ROE.

Analysts:
Jeremy MOK
jeremy.mok@cgsi.com
CHONG Tjen-San, CFA
tjen-san.chong@cgsi.com

PETALING JAYA: Engtex Group Bhd is a beneficiary of the water pipe replacement market in the country, given its dominant market position in large-diameter mild steel pipes and ductile iron pipes.

General Meetings: Outcome of Meeting

Quarterly rpt on consolidated results for the financial period ended 31/03/2024