Ukraine and Russia are important sources of noble gases and precious metals used in chipmaking. These include neon, argon, xenon and krypton from the former, and hexafluorobutadiene (C4F6) and palladium from the latter. Ukraine, for example, controls 70% of the world's supply of neon, according to research company TrendForce.
The research house added that Kelington was well placed to secure base build contracts for United Microelectronics Corp’s new US$5bil (RM20.97bil) 22/28 nanometre (nm) fab in Singapore when the tender opens.
KUALA LUMPUR (April 26): Kelington Group Bhd said the group has accepted a letter of intent for an onsite industrial gases supply scheme with an expected revenue of RM180 million over a 10-year period.
Kelington said its indirect subsidiary, Ace Gases Marketing Sdn Bhd, will be setting up onsite generators to produce nitrogen, hydrogen and oxygen gases at the customer’s semiconductor manufacturing plant located at Kulim, Kedah and the supply of gases is expected to commence in the first quarter of 2023.
“Subject to the signing of a definitive agreement, this supply scheme is expected to generate a cumulative revenue of approximately RM180 million for the group over a period of 10 years via monthly fixed facility fees and sales of gases,” the group said.
Kelington said the supply scheme is expected to contribute positively towards its earnings and net assets over the 10-year duration, starting from 2023.
Kelington shares closed two sen or 1.6% higher at RM1.27 on Tuesday (April 26), valuing the group at RM819.5 million.
Given that the orderbook replenishment falls within our expectations, we made no changes to our earnings forecast, pending their 1Q22 quarterly results release in coming weeks.
Therefore, we maintained our BUY recommendation on KGB with an unchanged target price of RM2.10. We derive our target price by assigning targeted P/E multiple of 28.0x to FY22f EPS of 7.5 sen.
The assigned targeted P/E multiple is slightly above with the valuations of the technology sector that is trading at 25.3x for 2022f. The slight premium is justifiable due to KGB’s niche business model.
Risks to our recommendation and target price include weaker-than-expected targeted orderbook replenishment of RM700.0m for FY22f.
Any slowdown in semiconductor sales may dampen the large scale UHP projects delivery to China and Singapore, given that the UHP segment plays an integral role towards the total revenue contribution and earnings growth.
WASHINGTON DC: Malaysia is expected to garner RM14.62 billion in new investments from the United States (US) following the Trade and Investment Mission (TIM) led by Senior Minister and International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali.
Azmin said many US-based companies had expressed their commitments to expand their operations and footprint in Malaysia during his 10-day US TIM which began on May 8.
"We are going to make some major announcements in the next few days in terms of the total new investments that have been committed by these companies," he told Bernama and TV3 reporters here, Tuesday.
Thus far, Azmin had met several high-technology (hi-tech) companies such global semiconductor company Texas Instruments Inc. and global materials supplier to the electronics assembly and semiconductor packaging industries Indium Corporation, and he is scheduled to engage with more hi-tech industry players on his next visits to San Francisco, Seattle and Los Angeles.
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