• Water pipes makers set to make a splash again. According to the Edge Malaysia Weekly (20-26 June 2016), water pipe makers look set to excite investors again following positive news flows from the recent Asia Water 2016 conference, which saw the government affi rming its commitment to the water reform agenda and solving Selangor’s wat er restructuring exercise by end 2016.

• Overall, Malaysia reportedly has 44,000km of old asbestos-cement (AC) pipes that have been wearing out over the years. Leaks in these old pipes are the main contribut or to the country’s high rate of non -revenue water (NRW) of above 35%. The replacement market is estimated at more than RM10bn, with hal f of the old AC pipes expected to be replaced by mild steel (MS) and ductile iron (DI) pipes.

• Engtex is one of the major beneficiaries given its track record and sizeable capacity. In June, Engtex secured a RM25m contract from Syabas to supply DI pipes as part of the state’s water pipe replacement programme. According to Engtex’s managi ng director and founder Datuk Ng Hook, apart from the RM25m DI pipe contract, the group aims to bid for all tenders to be awarded by Syabas.

Source: Hong Leong Investment Bank Research - 11 Jul 2016