The Journey of Leverage
EITA: the next GEM to shine
A rebound in global stocks gained traction amid speculation losses that triggered a bear market were excessive. China’s yuan jumped by the most since a dollar peg was scrapped in 2005, while the yen retreated with gold as haven assets fell out of favour. Shares have become oversold again and due for at least a bounce, which may now be getting under way.
Is lift and bus duct manufacturer EITA Resources Bhd (EITA) climbing on the bandwagon to diversifying its earnings base amid concerns that the country’s economy will remain sluggish this year?
So, what are the potential catalysts for EITA?
growth driver and future plan by EITA:
- Product expansion:
Sigriner Automation (Mfg) Sdn Bhd (“Sigriner”), was set up in mid-2015 to produce Elevator Control systems for both the local and overseas markets. It is now in the midst of setting up its production facility.
Furutec Electrical Sdn Bhd (“Furutec Electrical”) has successfully expanded its portfolio of busduct offerings, namely, Aluminum Housing Busduct system and Cast Resin Busduct system with increasing new sales for these products.
Under EITA Power System with its PYROTEC® brand of Fire-Resistant Cable, they are in the midst of developing a new range of Flame Retardant Cable.
- Manufacturing expansion:
EITA-Schneider (MFG) Sdn Bhd (“EITA-Schneider”) has relocated to Shah Alam to expand its manufacturing capacity and to consolidate its warehouse operations in order to cater to increased business activities, such as, the MRT project. Eventually, the Bukit Raja site will house the elevator new manufacturing facility, warehouse and Test Tower. It is targeted for completion in 2017. Furutec Electrical successfully implemented automation. ( no need to worry about Labour cost). It is now able to offer Aluminum Housing Busduct Systems and Cast Resin Busduct Systems and has already successfully secured projects for these new products. These new busduct systems will bode well for Furutec as it seeks to expand overseas.
- M&A strategics :
its group managing director and executive director Fu Wing Hoong said the group is scouting
for expansion opportunities in the electrical and electronics components section which comes
under its marketing and distribution division. It is a market that EITA is interested to enter. " We hope to gain market share in the E&E sector through an acquisition." the CEO said. As for current, EITA's cash stood at RM 29.5 million. Mr Fu also mentioned that his proposed acquisition of Transsystem Continental Sdn Bhd (TCSB) , which would give it access to the power distribution segment of the can industry. By then, EITA will turn into full fledged high voltage market player in the industry. ( on Nov 25, 2015, EITA had entered into an agreement to purchase 120,000 shares of TCSB)
* there is no doubt that this will boost its subsequent earning in coming quarters!
As for current financial year 2016, EITA will be busy with its Mass Rapid Transit (MRT). In 2015, EITA clinched a RM 79 million contract to supply lives and escalators for all the station of sungai Buloh-Kajang line of MRT. Once the contracts end, its acquisition of TCSB will definitely contribute to its top line and cushion effects from any downturn in the market!
Sigriner Automation (Mfg) Sdn Bhd (“Sigriner”), was set up in mid-2015 to produce Elevator Control systems for both the local and overseas markets. It is now in the midst of setting up its production facility.
Furutec Electrical Sdn Bhd (“Furutec Electrical”) has successfully expanded its portfolio of busduct offerings, namely, Aluminum Housing Busduct system and Cast Resin Busduct system with increasing new sales for these products.
Under EITA Power System with its PYROTEC® brand of Fire-Resistant Cable, they are in the midst of developing a new range of Flame Retardant Cable.
- Manufacturing expansion:
EITA-Schneider (MFG) Sdn Bhd (“EITA-Schneider”) has relocated to Shah Alam to expand its manufacturing capacity and to consolidate its warehouse operations in order to cater to increased business activities, such as, the MRT project. Eventually, the Bukit Raja site will house the elevator new manufacturing facility, warehouse and Test Tower. It is targeted for completion in 2017. Furutec Electrical successfully implemented automation. ( no need to worry about Labour cost). It is now able to offer Aluminum Housing Busduct Systems and Cast Resin Busduct Systems and has already successfully secured projects for these new products. These new busduct systems will bode well for Furutec as it seeks to expand overseas.
- M&A strategics :
its group managing director and executive director Fu Wing Hoong said the group is scouting
for expansion opportunities in the electrical and electronics components section which comes
under its marketing and distribution division. It is a market that EITA is interested to enter. " We hope to gain market share in the E&E sector through an acquisition." the CEO said. As for current, EITA's cash stood at RM 29.5 million. Mr Fu also mentioned that his proposed acquisition of Transsystem Continental Sdn Bhd (TCSB) , which would give it access to the power distribution segment of the can industry. By then, EITA will turn into full fledged high voltage market player in the industry. ( on Nov 25, 2015, EITA had entered into an agreement to purchase 120,000 shares of TCSB)
* there is no doubt that this will boost its subsequent earning in coming quarters!
As for current financial year 2016, EITA will be busy with its Mass Rapid Transit (MRT). In 2015, EITA clinched a RM 79 million contract to supply lives and escalators for all the station of sungai Buloh-Kajang line of MRT. Once the contracts end, its acquisition of TCSB will definitely contribute to its top line and cushion effects from any downturn in the market!
EITA is going to announce its financial result soon within February 2016. Will its EPS shoot up ? Let's wait and see!
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
