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Overview
Financial Highlight
HeadlinesBusiness Background Kelington Group Bhd is a provider of gas and chemical delivery solutions for the technology industry. The company supplies various industrial gases and specialty gases in form of portable high-pressure gas cylinders or from on-site gas generators for use in the electronics, semiconductor, food processing, and oil and gas industries. Its segments include Ultra High Purity delivery systems that ensure safe handling of delivery and distribution of gases and chemicals; Process engineering that engineers and constructs mechanical and electrical systems that support industrial processes; and General contracting works providing civil and mechanical and engineering services to clean rooms and Research and Development centres.
  paperplane Kelington (KGRB MK, MYR1.33, Not rated): Latest orders show prospects intact; warrants are currently in-the-money • Secured several orders totalling MYR53m. • Riding on “Made in China 2025” campaign. • Trading at 14.3x consensus FY19 EPS. What’s New? Kelington has secured several orders totalling MYR53m, bringing YTD job win to MYR146m. The new contracts secured were largely for specialized engineering works under the Ultra High Purity (UHP) segments for wafer fabs in China. The majority of the contracts were awarded by global renowned semiconductor players there. With these awards, Kelington’s outstanding order book is now at MYR406m, equivalent to ~116% of FY18 revenue. Judging from the latest trend, it appears that management’s expansion into China is bearing fruit. Revenue from China jumped 93% YoY in FY18, and the group is set to further ride on the “Made in China 2025” campaign. Exports market is key. Moving forward, export markets will have a significant impact to the group’s profitability. Today, China and Singapore account for approximately 71% of its outstanding order book. Notably, these orders are mainly from the UHP division. Separately, its Industrial Gases division should also do better in FY19, underpinned by higher contribution from the new businesses: on-site gas supply and manufacturing of liquid carbon dioxide (likely to commence in 3Q19). Tender book. Against a stronger pipeline, the street is forecasting a robust 22.2% 3-year EPS CAGR for FY18-21. Note that the group is also tendering for approximately MYR1.2b of projects, across its key operating markets like Malaysia, Singapore, China and Taiwan. Valuation. Brokers are bullish on the stock with two Buys and a mean target price of MYR1.56, offering a upside potential of around 17%. Valuation wise, the stock is trading at 14.3x consensus FY19 EPS of 9.3sen, lower than its 3-year historical average P/E of 15.9x. Investors who wish to invest in Kelington may consider its warrants which are currently in-the-money (but due to expire in Jun 2019). Healthy balance sheet. Note that Kelington also has a healthy balance sheet. At end-Dec 2018, the group is sitting on a net cash of ~MYR50m (~MYR0.17/sh), which is approximately 13% of its current market capitalisation. 18/04/2019 9:35 AM  shpg22 I had issued strong warning on LONBISC when its near recent peak before dive. Now I m issuing the same strong warning on KGB. 28/04/2019 12:31 PM Gabriel Khoo KWAP and now kenanga growth fund as kgb substantial shareholder. Prospect is good 29/04/2019 6:52 PM  SuperPanda shpg22 i bought below 80c and still holding, it shoot to 1.30 after rakuten start covering and fund start to collect. when co2 start contribute end this year, earning will improve and next is TP 1.60 im sitting on big profit now .. ha ha 100x 01/05/2019 7:52 PM shpg22 Looks like that chicken that challenge me had deleted his post. Shame on u. 02/05/2019 1:47 PM  YAPSS Day 65 of Fundamental Daily, YAPSS will be covering Kelington Group Berhad's fundamental via a short animated video. It is solely based on my opinion and I hope it helps :) #YAPSS #FundamentalDaily #KelingtonGroupBerhad Click the on the link to find out more: https://youtu.be/2UJnsyoOu6E 07/05/2019 9:56 PM Gabriel Khoo https://www.thestar.com.my/business/business-news/2019/05/21/rhb-research-retains-buy-on-kelington-with-higher-target-price/ 22/05/2019 7:44 PM shpg22 Pls ignore all the analyst target price if you don't want to lose your hard earn money 27/05/2019 9:44 AM Gabriel Khoo KUALA LUMPUR: Kelington Group Bhd is confident of achieving another record year for the 12 months ending Dec 31, 2019 (FY19), which will mark a fourth straight year of record net profit after a blip in FY15. The integrated engineering solutions provider swung into a net loss of RM2.62 million in FY15 as it recognised impairment losses on certain projects, trade receivables and amounts owing by customers. However, it rebounded the following year and has been profitable since. Group chief executive officer Raymond Gan Hung Keng said FY19 profit growth will be driven by its ultra-high purity (UHP) business, which continues to be the group’s anchor of growth. “I am confident we will [perform] better this year, thanks to a higher proportion of UHP jobs that bring higher profit margins,” he told The Edge Financial Daily in an interview. He added that the bulk of the group’s outstanding order book totalling RM330 million will be recognised this year. Kelington reported its highest-ever annual net profit in FY18, which jumped 59% year-on-year (y-o-y) to RM18.32 million with revenue up 12% y-o-y to RM350.02 million. The record earnings had a favourable impact on its share price, which rose to an all-time high of RM1.39 on April 25. Its price has since pulled back, closing at RM1.25 last Thursday, but still up 51% from 83 sen a year ago. This brings the group’s market capitalisation to RM379.59 million. On its performance in the first quarter of FY19 (1QFY19), it is on track to meet its full-year expectations. The group’s 1QFY19 net profit was up 5% y-o-y at RM4.84 million despite a decrease in revenue to RM76.41 million from RM86.55 million in 1QFY18. Year-to-date, Kelington has clinched new projects totalling RM146 million, 87% higher than the RM79 million achieved in 1QFY18. This brings the group’s total outstanding order book to RM330 million, 70% of which are derived from UHP projects, followed by process engineering (16%), general contracting (4%) and industrial gas business (1%). Gan declined to give the group’s order book target for 2019, except to say that it is still too early to tell. The total value of projects clinched by Kelington last year hit record of RM424 million, surpassing the RM374 million achieved in FY17. Gan said the group is tendering for RM1.2 billion worth of jobs, in Malaysia, Singapore, China and Taiwan. He noted that so far, there has been no slowdown in the number of tenders from China, despite ongoing trade tensions between the US and China and negative growth data recorded on the latest worldwide spending on semiconductor equipment. Of the group’s total outstanding order book, China accounts for 15%, followed by Singapore at 59% and Malaysia, 17%. The most recent order the group secured was from China, a RM53 million new contract for specialised engineering works under the UHP segment for wafer fabrication. According to the US-based Semiconductor Equipment and Material International data, China remained as one of the top three world’s largest semiconductor equipment spenders in the first quarter of 2019 (1Q19) with billings of US$2.36 billion, down 11% y-o-y from RM2.69 billion. Still, China outperformed worldwide spending on semiconductor equipment, which declined 19% y-o-y to US$13.79 billion. Industrial gas business to take off in FY20 On its industrial gas business segment, where it made its first foray in 2016, Gan said the business is profitable albeit its contribution to the group’s revenue is still immaterial. However, he expects its contribution to take off from FY20 when the group’s liquid carbon dioxide (LCO2) manufacturing plant in Kerteh, Terengganu commences production in 4Q19. It is setting aside RM60 million in capital expenditure for the new plant, half of which will be used this year and the rest progressively over the next five years. Already, Kelington has secured orders for the new LCO2 plant, which will take up some 20% of total annual capacity of 50,000 tonnes. Additionally, it has secured a 10-year contract to supply on-site nitrogen gas to a photovoltaic manufacturer’s manufacturing plant. 17/06/2019 9:08 AM paperplane Kelington (KGRB MK, MYR1.24, Not rated): Briefing note: In order • FY18 was a record year. • Healthy prospects lies ahead. • Trading at 11.6x consensus FY20 EPS. What’s New? Kelington hosted a meeting last week. Management provided updates on its existing projects as well as future outlook. Key takeaways as below: FY18 was a record year (reported PATMI +57% YoY), attributable to larger UHP projects completed, better project mix and a lower effective tax rate compared to a year ago. Management is equally excited about FY19 after 1Q19 PATMI rose 15% YoY. On a sequential basis, 1Q19 PATMI was down 5% QoQ as 1Q is seasonally weaker. Strong order book. Its outstanding order book is now at MYR330m, equivalent to approximately 95% its FY18 revenue. Note that Kelington’s projects are mostly short-term in nature, ranging from 6-9 months. Management expect more job wins in coming months. Current tender book is ~MYR1.2b. For comparison, the group secured MYR424m worth of projects in FY18 vs. MYR374m in FY17. In 1Q19, its has secured MYR146m worth of projects vs. MYR79m a year ago. Of the MYR330m outstanding order book, about 79% and 16% are from UHP and PE projects respectively. These projects tend to carry higher margins in nature, underlying management’s optimism for FY19. Orders from Singapore accounted for about 60% of its outstanding order book. Setback. Trade tensions between the US and China could pose some challenges. This, however, is cushioned by its geographical diversification. Projects from China made up around 15% of its outstanding order book and about half of its tender book. The diversification into industrial gases supply should provide a steady income to the group. To grow its industrial gas division. At present, Kelington has secured its first 10-year industrial gas supply contract. Contribution is small but management envisage to grow its industrial gas division to contribute 30% of the group’s revenue within 3-5 years. For its liquid carbon dioxide business, the setup of the new plant is scheduled to commence production by 4Q19. Balance sheet is healthy. Kelington is sitting on a net cash of MYR76.5m at end-Mar 2019 (approximately 25sen/sh). Capex is need-based, particularly if it were to invest in air separation unit which is critical for industrial gas operations. Valuation. Overall, management is upbeat about its long-term growth prospects. Brokers are also bullish on the stock, with two Buys and a mean target price of MYR1.67. Valuation wise, the stock is trading at 11.6x consensus FY20 EPS of 10.7sen, below its 3-year historical average P/E of 15.9x. 18/06/2019 8:45 AM  Investar2862 Even though it is a very good stock, buying at the "right price" is very important. Never buy stock at its high. Be patient and wait for the right time to accumulate. 19/06/2019 8:38 AM Gabriel Khoo KUCHING: Kelington Group Bhd (Kelington) remains optimistic on its Ultra High Purity (UHP) business and believes that its long-term growth outlook in China, Singapore and Taiwan remains intact. The team at Affin Hwang Investment Bank Bhd (AffinHwang Capital) said despite a recent slowdown in China’s semiconductor capex, Kelington’s Singapore business will likely cushion the short-term decline driven by expansion, while Taiwan will likely see higher activities ahead with active bidding in solar projects. “Kelington’s 2019E 29 per cent EPS earnings growth will likely continue to be driven by its UHP business,” it affirmed in a report yesterday. Fabrication work for the plant’s equipment was done in China and will be delivered by the 1st week of July. “While the focus has not permanently shifted away from China with the expansion of wafer fabrication plants still looking promising, the spotlight will shine on the UHP projects in Singapore, which also generally command a higher margin.” While contribution from Kelington’s Taiwan region has fallen from a high of 11 to two per cent in recent quarters, Affinhwang Capital was appeased by management plans to refocus efforts in this region by actively bidding for more solar-related installation and maintenance projects. Notably, the bulk of the current RM1.2 billion backlog is still largely focused in China. This was on the back of Kelington’s liquid carbon dioxide plant being on track to start up by the third quarter of this year (3Q19). “The piling work for the site has been completed. KGB has taken delivery of its tankers and is currently in the process of strengthening its chassis; it is on track for concurrent completion with the plant. “Fabrication work for the plant’s equipment was done in China and will be delivered by the 1st week of July. Meanwhile, construction work is expected to commence in mid-July and targeted to be completed by September. “To date, management has spent RM30m out of the RM50m estimated project capex, with the remainder to be used progressively to expand the CO2 tankers fleet. KGB has secured orders for 30 per cent of the capacity, mostly by cylinder refillers as the end gas users generally prefer to see the product quality once the plant has started operation. “This plant is expected to contribute about 8 per cent of total profit in FY20E, which we have already factored into our model.” 27/06/2019 7:11 PM Gabriel Khoo Trade war appears to see some progress after summit. FM may start sell some after accumulated so much over last 6 months Free float now about 30%. The balance control by founders and FMs. 29/06/2019 11:36 PM wan7075 Notice of new substantial holder - SOH TONG HWA on 28-Jun-2019. who is this mr Soh? 04/07/2019 6:20 PM SuperPanda wait until co2 start contributes, more upside bcoz fund already collected since.70 15/07/2019 4:10 PM Gabriel Khoo Mr Soh will help to expand the industrial gas biz. Industry outlook is superb 15/07/2019 9:26 PM Gabriel Khoo Great result and there was 81m of projected awarded in 2Q2019...albeit no annoucement....with totalling of rm227m of new project awarded in 1h2019... 22/08/2019 8:47 PM wan7075 boss gabriel, if no announcement, how do you know there was 81m of projected awarded? the profit like always stuck at 1.7Xc. hope that next qtr EPS can reach >2c.. 23/08/2019 10:47 AM Gabriel Khoo Commentary Of Prospects The Group’s outlook remains bright on the back of strong replenishment of projects, while we look forward to the commencement of our new business division, manufacturing of liquid carbon dioxide. Wecontinue to gain traction in our project flow as we clinched an addition RM81 million worth of projects in 2Q2019, boosting our total new project orders to RM227 million in FY2019. A large bulk of the project orders is from the UHP and Process Engineering division. Inclusive of carried forward projects, Kelington’s total orderbook grew to RM486 million, of which RM312 million remains outstanding. We expect the Group’s performance to continue be driven by the UHP division in Singapore and China in FY2019. Furthermore, the Group made encouraging progress in its expansion plans for the Industrial Gases division. The commissioning of the manufacturing of liquid carbon dioxide (“LC02”) business is on track, with production expected to commence this year. We anticipate positive contribution from this new business from FY2020 onwards. The Group’s key operations outside Malaysia, which are Taiwan, China and Singapore are carried out in the respective local currencies of those countries. Hence, the Group enjoys a natural currency hedge, and this minimizes the Group’s exposure to the fluctuations in the currency markets. 23/08/2019 11:33 AM Gabriel Khoo Integrated engineering solutions provider, Kelington Group Berhad (“Kelington” or “Group”) is pleased to announce the opening of its new fabrication facility in Suzhou-Chuzhou Modern Industrial Park, China. The 37,458-square-foot facility will be operated under the Group’s wholly-owned indirect subsidiary, KE System Integration (ChuZhou) Co. Ltd. The fabrication facility will be mainly involved in Engineering, Procurement, Construction and Commissioning (“EPCC”) of process systems for the electronics industry and fabrication of own-brand Ultra High Purity (“UHP”) gas and chemical delivery equipments. The grand opening ceremony was graced by Mr. Hai Huang, Deputy Head of Chuzhou Investment Promotion Bureau, Mr. Li Da Ming, Deputy Director of Management Committee for China-Singapore Suzhou and Chuzhou High-Tech Industrial Development Zone and Mr. Xu Pei Chang, Deputy Secretary of China-Singapore Suzhou and Chuzhou High-Tech Industrial Development Zone. Ir. Raymond Gan, Chief Executive Officer of Kelington Group Berhad said, “We have been operating in China since 2002 and today, China is one of our key international markets. Revenue from China represented 30% of the Group’s revenue in the first six months ended 30 June 2019.” “This new setup is strategic for the Group as it allows us to further expand our pool of customers, including those from the electronics industry. In addition to that, our scope of services and capabilities will be broadened to handle more complex UHP projects such as handling the delivery systems for special gases.” “We will be manufacturing our own design UHP equipments for our operations as well as offering it to other customers. This will lead to higher cost savings and better quality control, enhancing our operational efficiencies and cost competitiveness in China. We believe this will accelerate our growth trajectory within China, bolstering our UHP services and market share there.” 27/09/2019 3:53 PM Gabriel Khoo Kelington Group Bhd (Oct 2, RM1.32) Maintain buy with an unchanged target price (TP) of RM1.68: Kelington Group Bhd’s (KGB) financial year 2019 (FY19) earnings look to be on track (first half of 2019 [1HFY19] earnings have already exceeded that for 1HFY18); we expect order book replenishment to match 2018’s level on a softer business environment. Work activities from China are expected to gain traction from 2H19. Separately, the liquid carbon dioxide (LCO2) plant will commence production by end-October, which should further enhance earnings visibility for the group and could drive a dividend per share and valuation rerating. The slowdown in China’s semi-conductor fabrication spending is expected to turn around from 2H19. Over the past few quarters, KGB was able to sustain its earnings with more robust work activities in Singapore, which also garnered higher margins compared to other regions. The Taiwan operation is also expected to turn around in FY19 after securing its first solar project, with a 15–16% net profit margin. KGB has already secured customers for 30% of its LCO2 capacity, mostly from cylinder refillers, and will be able to break even at this level of utilisation. The management targets to market the product beyond canister refillers to canned beverage producers. Furthermore, it has also begun looking to export KGB’s products by setting up storage tanks in Singapore for distribution. The plant is now guided to commence operation by end-October at the latest, after seeing a slight delay relating to the installation of the water pipes and power supply. We expect the overall group profit margin to improve once the plant starts up as industrial gas margins are higher at 30% versus 16–17% for the current business. We maintain our “buy” call and TP at RM1.68, based on a 16 times calendar year 2020 price-earnings ratio. We believe KGB is a good proxy to ride on the recovery in the semiconductor capital expenditure cycle and we like its strong net cash balance sheet of RM70 million (23 sen per share) and its upcoming industrial gas business model. Downside risks to our “buy” call include a continuous slowdown in global semiconductor spending, and deterioration in existing business margins. — Affin Hwang Capital, Oct 2 03/10/2019 4:47 PM Gabriel Khoo Further to the Company’s announcements made on 20 November 2017, 23 November 2017, and 27 June 2019, the Board of Directors of Kelington wishes to announce that its 97.2% owned subsidiary, Ace Gases Sdn Bhd has on 23 October 2019 commenced the liquid carbon dioxide production with an annual production capacity of up to 50,000 tonnes at the LCO2 Plant located at PT 21896, Kawasan Perindustrian Lot P, Mukim Kerteh, 24300 Daerah Kemaman, Terengganu. This announcement is dated 23 October 2019. 23/10/2019 5:23 PM TecStock https://www.theedgemarkets.com/article/kelingtons-liquid-carbon-dioxide-plant-terengganu-kicks 23/10/2019 9:06 PM TecStock https://www.theedgemarkets.com/article/kelingtons-liquid-carbon-dioxide-plant-terengganu-kicks 23/10/2019 9:08 PM  James Ng https://klse.i3investor.com/blogs/general/233380.jsp [转贴] [KELINGTON GROUP BHD：继续在项目流程中进步，因为他们在2019年第二季度获得了额外价值8,100万令吉的项目，从而在2019财年将新项目的总订单增加至2.27亿令吉] - James的股票投资James Share Investing 03/11/2019 1:41 PM MCA_ GAN HUNG KENG 11-Nov-2019 Disposed 68,500 0.000 View Detail GAN HUNG KENG 08-Nov-2019 Disposed 330,000 0.000 View Detail CHAM TECK KUANG 11-Oct-2019 Disposed 6,000,000 0.000 12/11/2019 10:32 AM  |
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