Life Water laying foundations for sustainable growth, future
https://thesun.my/business-news/life-water-laying-foundations-for-sustainable-growth-future-AI13283012

3REN Bhd (3REN, 0328)

Riding on the growth in automation and tech  
 
3REN Bhd (3REN, 0328) home grown company with over 16 years track record providing comprehensive automation and engineering solutions to key customer Intel and other MNCs across Malaysia's semiconductor lifecycle, from front-end to back-end processes.

🎯 We forecast +23.5% in earnings for FY25, with 3REN's fair value at RM0.45, based on FY25 PER 20x closely with industry peers and at discount to Bloomberg's 36x PER consensus for the Bursa Malaysia Technology Index.
 
1️⃣ 3REN has built strong relationships primarily within the semiconductor and electrical and electronics (E&E) industries, serving key clients such as Intel, KellyOCG, and several multinational companies (MNCs).

💎 In 2023, 3REN expanded its client base by acquiring new clients, including Customers D and E, with a high retention rate (69%) from recurring customers, reflecting its service quality and reliability within these competitive industries.

💎 3REN continues to broaden its client base, amid concerns of their major client Intel's recent layoffs and revenue challenges.

💎 As Intel restructure, opportunities for increased outsourcing places 3REN at sweet spot to capture more business. This aligns with industry trends where large technology firms increasingly outsource functions to boost efficiency, likely strengthening demand for 3REN's cost-effective engineering solutions and improving client retention.
 
2️⃣ R&D and innovation.

💎 3REN allocating RM5.1 million, (16.56% of listing proceeds), to establish (R&D) innovation center at its Tangkas plant 9, investing in IT software, recruiting expertise in field of AI, data science, and cloud engineering.

💎 3REN will also further develop its Nervii platform and Universal Test Automation Platform (Uni-TAP), targeting commercialization by 4QCY26.
 
3️⃣ Geographical expansion.

💎 3REN plans to establish two Delivery Centres in Penang to bolster its product engineering services segment and streamline operations by shifting project work from customer premises to these dedicated facilities.

💎 This allows 3REN to offer more sophisticated engineering services and provide value-added offerings, including turnkey embedded design services.

💎 Furthermore, 3REN plans to establish a sales and marketing office in Singapore by 1H25, with recent orders from Singaporean clients already contributing 2.6% of 6MFY24 revenue, underscore its ability to secure more projects in the region and demonstrate promising growth momentum.

💎 The company also aims to expand globally, with offices in India and the US over the next five years, strengthening its global presence.
 
4️⃣ Earnings visibility.

💎 RM30.4m outstanding orderbook providing earnings visibility for FY24 and FY25.

Rakuten Trade Ideas 06112024

3REN-ding Forward In The Semiconductor & Electronics Space

• With more than 16 years of experience, 3REN is a Malaysian investment holding company that specializes in automation solutions and engineering services, primarily serving the semiconductor, electronics and manufacturing industries.

• Moving forward, we project a 3-year earnings CAGR of 12.0%, with core PAT expected to reach RM13.0-16.3m over the next three years, supported by (i) enhanced capacity for advanced product engineering services, facilitated by the establishment of two new Delivery Centres, and (ii) a favourable outlook in the global semiconductor, electronics and manufacturing sectors, bolstered by the adoption of AI, IoT and smart factories through Industry 4.0 and 5.0 technology.

• We assign a fair value of RM0.45 per share for 3REN, representing a 60.4% upside from the IPO price of RM0.28. This valuation is based on a P/E ratio of 20x, pegged to the FY25f EPS of 2.25 sen. The lower P/E reflects a discount due to 3REN’s smaller market capitalization compared to its larger industry counterparts.

- Mcca Securities

3REN Releases 9M Earnings Report Prior To Listing On ACE Market
https://www.businesstoday.com.my/2024/11/04/3ren-releases-9m-earnings-report-prior-to-listing-on-ace-market/

We ascribe a fair value of RM0.385 (an upside of 60.4% against IPO price of RM0.24)
for OBHB. Our valuation is derived by pegging a P/E of 18x to the mid-FY26f EPS of
2.13 sen. We believe the P/E of 18x is fair, given that the average P/E of the closest
peers (Fig #7) stands at 17.6x - Mcca Securities

Loke: WCE to ease NSE congestion, boost local economy
https://theedgemalaysia.com/node/732506

OBHB are in compliance with various International & Malaysian recognized standards incl. U.S FDA ( Food & Drug Administration), U.S. HACCP (Hazard Analysis Critical Control Points System) , Australia NASAA Certified Organic, ISO 9001:2015 International Quality Management System, MeSTI from Kementerian Kesihatan, NPRA Malaysia from National Pharmaceutical Regulatory Agency, GMP Certified Good Manufacturing Practises, Halal Cert, etc. Kindly refer to the co presentation slides posted in BursaKakis Telegram Channel.

OB Holdings to more than double production capacity with new factory
https://theedgemalaysia.com/node/731961

OBHB is in fortified food and beverages (F&B) and dietary supplements to third party brand owners and Orgabio is in beverages premix manufacturer. OBHB @ 0.25 is trading at forward PE 17 & Orgabio @ 0.385 is trading at forward PE 23.

WCE to support Johor's economic growth — exco
https://theedgemalaysia.com/node/731639

Top Class ratings animation - Teenage Mutant Ninja Turtles (7.9), Hanazuki (7.9) & Beavis and Butt Head (8.4).

Construction of West Coast Expressway will benefit Melaka — Chief Minister
https://theedgemalaysia.com/node/730808

Largest M&E job secured; more to come
▪ Clinched RM82m M&E contract for a semiconductor project in Johor
▪ This is a significant milestone, representing its first major entry into Johor and its
largest contract win to date
▪ Maintain BUY rating and target price of RM1.65

Secured semiconductor M&E contract
Critical announced that it has secured a mechanical & electrical (M&E) contract with a USbased
MNC. This contract involves M&E related fit-out, cleanroom and interior design works
for a 3-storey office building, 1-storey production and warehouse facility in Pasir Gudang,
Johor Bahru. The work is expected to begin in Nov24, and is slated for completion within 4
months.

Orderbook grows to RM204m; more contract wins to follow
We are positive with this contract announcement being Critical’s single largest win to date
and marking its expansion into Johor, broadening its geographical reach beyond Penang. This
is its first announced contract win since listing, bringing the total orderbook to RM204m.
Given Critical’s role as a M&E main contractor, we believe the profit after tax margin for this
project to be higher. Critical’s total tender book stands at RM780m, with 70% in the
semiconductor sector and 30% in data centres. Critical is pursuing several semiconductor
projects, if materialize, could serve as near-term catalysts. Aside from semiconductor
segment, we believe that M&E contractors like Critical are likely to see a stronger uptick in
data centre related job wins, especially following recent contract awards to the main
contractor.

Maintain BUY with target price of RM1.65
With this contract win, Critical is on track to meet our FY25 revenue forecasts. We are
keeping our earnings forecasts unchanged, with this award falling under our order book
replenishment target. We reiterate our BUY rating and target price of RM1.65, based on 20x
PE multiple on FY25 EPS. We expect valuation to further re-rating supported by its healthy
order visibility, and encouraging tender outlook, which we believe have yet to be fully
reflected in the current share price. Key downside risks include: slower-than-expected
contract replenishment, any unforeseen project delays, and margin pressure.

Phillip Capital 1/10/2024

Critical Holdings wins RM82m contract from US-based multinational company
https://theedgemalaysia.com/node/728504

Toll collection on Section 1 of WCE to commence on Sept 30 after month-long toll-free operation
https://theedgemalaysia.com/node/728321

Penang State Govt To Continue To Attract Investors. Two of Penang’s upcoming industrial parks will provide several hundred hectares of industrial land to meet the growing demands by both local and international investors, says chief minister Chow Kon Yeow.
https://www.bernama.com/en/news.php?id=2340941#:~:text=GEORGE%20TOWN%2C%20Sept%2016%20(Bernama,in%20Batu%20Kawan%20near%20here.

Over 7 million tourists stayed overnight in Penang hotels last year, says Wong
https://www.buletinmutiara.com/over-7-million-tourists-stayed-overnight-in-penang-hotels-last-year/

The construction of Section 1 (Banting – South Klang Valley Expressway (SKVE)) and Section
2 (SKVE – Shah Alam Expressway (KESAS)) has been completed and is currently at the
inspection stage. The completion of these 2 sections will also provide connections to several
existing highways, namely the South Klang Valley Expressway (SKVE) and the Shah Alam
Expressway (KESAS), which would enhance the accessibility and connectivity of these areas
along the alignment. Section 1 is scheduled to be opened on 30 August 2024 - Q1 Jun 24 Report dd 22/8/2024.

Cape EMS CEO trims another 11.6% stake
https://theedgemalaysia.com/node/722112

Toll collection for Plaza Taiping Selatan & Plaza Trong begins on 24 July 2024.

TP 1.04 by RHB

Senfong TP 1.90 by Apex Securitues
https://youtu.be/2YOvRhGvFfc?si=m73Yn1OK0esZj__P

UOB Kay Hian says worst is over for electronic manufacturing services, keeps 'overweight' call on sector
https://theedgemalaysia.com/node/718046

KAB to collaborate with Permodalan Kedah on RE projects
https://www.thestar.com.my/business/business-news/2024/06/24/kab-to-collaborate-with-permodalan-kedah-on-re-projects

Sunview bags RM79mil solar EPCC contract in Bulgaria
https://www.thestar.com.my/business/business-news/2024/06/18/sunview-bags-rm79mil-solar-epcc-contract-in-bulgaria

Sunview Group shares climb to eight-month high on winning two projects in Uzbekistan
https://theedgemalaysia.com/node/715468

Sunview Group secures large scale solar project in Uzbekistan
https://theedgemalaysia.com/node/715403

*HLIB Retail Research – Bullish Tracker 11 June*

*SMART (0306)-ACE market, Industrial products & services- Building materials*

*A locally established manufacturer of decorative paints and protective coatings* Listed on 28 May 2024, Smart Asia Chemical Bhd (SMART-IPO RM0.40) develops, manufactures, distributes, and sells decorative paints, protective coatings, colourants, and related products. It also offers original design manufacturing or ODM services for third-party brands in the paint and coatings industry.

*Potential beneficiary from the construction upcycle*. It is poised to benefit from the expansion of Malaysia’s construction industry (2024-2029 CAGR: 8.6% – according to Mordor Intelligence), driven by the Government’s continuous efforts to roll-out infrastructure projects nationwide. The vibrant construction activities help increase demand for residential, commercial, and industrial properties, as well as supporting infrastructure, which bodes well for SMART by boosting demand for paints and coatings. Moreover, SMART's comprehensive multi-channel distribution network – spanning nine wholesalers, 937 dealers, and 14 authorised distributors across Malaysia and overseas – enables it to effectively expand market coverage and reach a diverse customer base. The deployment of smart colour point-of-sale (POS) tinting machines at 381 retail stores also supports product customisation and efficient inventory management, allowing retailers to mix-and-match colours on demand.

*Technical review*: SMART is trading at consensus 12x FY2025E P/E. Based on hourly chart, the successful breakouts above multipole key MAs and upper BB could spur greater upside towards 0.505-0.535-0.545 zones. Key supports are pegged at 0.43-0.44

✅Current price: RM0.475
✅Entry: RM0.45-0.46-0.48
✅Resistance: RM0.0.505-0.535-0.545
✅Cut loss: RM0.445
✅Risk profile: Medium

Wcehb - Q4 Mar 24 Report

Concession :

The West Coast Expressway (WCE) Project involves the development of a 233 kilometers tolled highway from Banting, Selangor to Taiping, Perak (including 40 kilometers of highway to be constructed later). The WCE Project is a build-operate-transfer project with a concession period of up to a maximum of 60 years effective from 20 December 2013.

The WCE Project is divided into 11 sections whereby 6 sections have been opened for traffic. These are Section 5 (New North Klang Straits Bypass - Bandar Bukit Raja Utara), Section 6 (Bandar Bukit Raja Utara – Assam Jawa), Section 8 (Hutan Melintang - Teluk Intan), Section 9 (Kampung Lekir - Changkat Cermin), Section 10 (Changkat Cermin - Beruas) and Section 11 (Beruas – Taiping Selatan). The recent opening of Section 11 signifies the full completion of the Perak alignment, spanning 120km within the WCE Project. The opening of Section 11’s Taiping
Selatan provides direct access between our WCE to North South Expressway (NSE) at Changkat Jering in Taiping, Perak, providing immense significance to the region’s economic and infrastructure development.

Traffic volume on the operational sections has witnessed steady traffic growth, with an increase of 37% from the preceding year. The recent openings of Sections 6 and 11 have significantly amplified the WCE’s daily traffic volume. The sectional average daily traffic for 4Q FY2024 increased by a significant 53% compared to 4Q FY2023. During the recent Raya festive period in April 2024, the traffic volume achieved a peak of 350,000 sectional average daily traffic, a significant 150% surge from the previous record in December 2023 of 140,000 sectional average daily traffic. The Group expects a further increase once Section 1 and Section 2 are completed
and operational in the near term.

The concession segment has reported a loss before tax in the current quarter mainly due to interest expense incurred in relation to project financing for completed sections of the WCE Project. In accordance with MFRS 123, an entity shall cease capitalising borrowing costs when substantially all the activities necessary to prepare the qualifying asset for its intended use is complete. The interest expense was capitalised as part of the infrastructure development expenditure prior to the completion of construction works. Upon the completion of sectional construction, the interest expense for these sections will be charged to the statement of profit or loss. The Group is expected to incur losses in the early years of toll operations due to the cessation of capitalisation of interest
expenses for completed sections. Despite the loss before tax, the Group recorded an earnings before interest, taxes, depreciation and amortisation (EBITDA) of RM18.1 million for FY2024, indicating the Group is profitable at an operating level.

The construction of Section 1 (Banting – South Klang Valley Expressway (SKVE)) and Section 2 (SKVE – Shah Alam Expressway (KESAS)) has been completed and is currently at the inspection stage. The completion of these 2 sections will also provide connections to several existing highways, namely the South Klang Valley Expressway (SKVE) and the Shah Alam Expressway (KESAS), which would enhance the accessibility and connectivity of these areas along the alignment.

The construction for the final 3 sections namely, Section 3 (KESAS – Federal Highway Route 2), Section 4 (Federal Highway Route 2 – New North South Klang Straits Bypass (NNKSB)) and Section 7 (Assam Jawa – Tanjung Karang) is currently ongoing.

Going forward, the additional sectional toll revenue is expected to further improve the future financial performance of the Group in terms of cash flows and operating results. In the long run, once the entire alignment of WCE is fully operational, the Group expects a shift towards profitability as revenue growth outpaces interest cost.

Construction :

The Group’s construction segment, managed by WCE Maju Sdn Bhd (formerly known as KEB Builders Sdn Bhd) (“WCE Maju”), is focused on the timely execution and completion of its construction projects with a total contract sum of RM400 million. These projects entail a design, build and manage basis, the construction works of a proposed access from West Coast
Expressway to a mixed development project in Kota Seri Langat (“the Seri Langat Project”) and construction works for Section 7, Part 2 of 2 (“Section 7B”) of the WCE Project which is approximately 10km in length from the beginning of the Assam Jawa Interchange towards the Tanjung Karang Interchange.

WCE Maju is focused on ensuring the successful execution of these projects to enhance sustainable growth in the construction segment.

30/5/2024

Google to invest US$2b for data centre and cloud region in Malaysia
https://theedgemalaysia.com/node/713588

Awantec’s position on the group’s viability vindicated as Bursa lifts trading suspension on its securities
https://theedgemalaysia.com/node/711451

Cape EMS’ 1Q net profit jumps 58%
https://theedgemalaysia.com/node/712452

Hubline confirms talks to acquire Equinas' Orkim
https://theedgemalaysia.com/node/712336

Announcement on Google's investment in Malaysia to be made soon.
https://www.nst.com.my/news/nation/2024/05/1047292/announcement-googles-investment-malaysia-be-made-soon-tengku-zafrul

In August 2021, Awantec subsidiary Awantec Systems Sdn Bhd was elevated to Googles's Premier Level Partner in Malaysia.

The partnership with Google allows Awantec to be part of government's cloud framework agreement (CFA) signed in May 2022. The CFA is one of the main trusts to drive the digital transformation of the public sector, especially by utilising the cloud network.

Awantec is doing analytics for Google and cloud transformation programmes for Google (for customers that use Google Suites).

Awantec is already serving about 400,000 civil servants through Google Workspace productivity tools and students using the Google Classroom application. Awantec provide Google Workplace services to five million schoolchildren.

Awantec has also penetrated the commercial segment, to tap the cloud transformation and migration market. Awantec believe that the business is going to see quite a big growth.

On May 7, Minister of Investment, Trade and Industry Tengku Zafrul Abdul Aziz confirmed that Google would invest in Malaysia.

The Edge Malaysia, May 13, 2024

Awantec & Google : Shaping Malaysia's Future With AI
https://www.facebook.com/share/p/9oSDbHxKrTmoaZP8/?mibextid=oFDknk

Excellent article on Awantec in The Edge Malaysia dd 13 May 2024.

Bursa lifts Awantec from affected issuer status after three years
https://theedgemalaysia.com/node/711130

Closed @ 0.205 with high volume on 08052024

How gold price movement influences pawnbroking activities
https://theedgemalaysia.com/node/709877

Awantec to strengthen its synergistic offerings to drive growth
https://www.thestar.com.my/business/business-news/2024/05/07/awantec-to-strengthen-its-synergistic-offerings-to-drive-growth

Get the recent Farm Price presentation slides from BursaKakis Telegram Channel.

A total of 16,647 applications for 2,077,765,600 Issue Shares with a value of RM498,663,744.00 were received from the Malaysian public, which represents an
overall oversubscription rate of 91.35 times.

Apex Securities advises investors to subscribe to ACE Market-bound Farm Price with fair value of 42 sen
https://theedgemalaysia.com/node/710053

SNS Network aims to tap country’s data centre boom through new venture
https://theedgemalaysia.com/node/708956

FPHB exported about 25.5% or 29.1 million of their total sales to Singapore in FY2023 and this market delivers higher gross profit margins of 33.1%. FPHB proudly served Compass Group (Singapore) Pte Ltd for 8 years, a subsidiary of Fortune Global 500 Company listed on The London Stock Exchange, Compass Group Plc. FPHB to secure more customers in Singapore going forward, with the set-up of Sales and marketing office.

Malacca Securities sets Farm Price’s fair value at 85% premium ahead of IPO
https://www.thestar.com.my/business/business-news/2024/04/30/malacca-securities-sets-farm-prices-fair-value-at-85-premium-ahead-of-ipo

SNS Network aims to tap country's data centre boom through new venture.

Having identified artificial intelligence (AI) opportunities in Malaysia, SNS Network Technology Bhd expects a meaningful contribution from the newly ventured data centre fit-out business segment.

Besides selling AI super servers, the ICT systems and solutions provider is also involved in testing and commissioning as well as operation and management within the premises of data centres. In short, SNS fills the gap between server manufacturers and server buyers.

The group believes its financial performance will be lifted by the sale of AI servers based on selling price of RM1.5 million per unit and gross profit margin of 15%, which is higher than its existing core business' gross profit margin of about 5%.

"This is game changer for SNS, and it's a new playground. Generative AI is at the beginning of a supercycle," co-founder and managing director Ko Yun Hung tells The Edge in an interview.

With more data centres being set up in the country, especially in Johore, he believes there will be growing demand for AI super servers. "We are seeing a lot of potential from this, for the enterprise segment," he shares, noting that several tech firms have express interest in these servers.

The Edge 22042024

Main Market-bound Keyfield to gain from AWB market upcycle
https://www.thestar.com.my/business/business-news/2024/04/19/main-market-bound-keyfield-to-gain-from-awb-market-upcycle

WCE’s Raya traffic beats target
https://www.thestar.com.my/business/business-news/2024/04/19/wces-raya-traffic-beats-target