Kelington Group Bhd (KGB) wholly owned subsidiary, Kelington Technologies Sdn Bhd (KTSB), has entered into a construction contract with a Franco-Italian multinational electronics and semiconductors manufacturer to undertake the design, engineering and construction works on a new manufacturing building. The contract value at approximately RM114.0m will commence in June 2022 and is expected to be completed by December 2023.

Established in 1991, Supercomnet Technologies Bhd (SCOMNET) has now evolved into a global award-winning medical devices and cable specialist. The group is embarking into a relatively large-scale expansion on its existing 4 factory buildings that will boost built-up area to more than 30,000 sqm upon completion in coming years. We initiate coverage on SCOMNET with a BUY call and fair value of RM1.51, based on a target P/E multiple of 38.0x (which is in line with the 5-year historical average) to FY23f diluted EPS of 4.0 sen.

Moving forward, we expect the maintenance segment to anchor the overall performance, backed by multiple long term federal and state road concession agreements will provide earnings visibility till 2029. Although the maintenance segment will be kept busy with current works on hand, we think that Protasco will continue to leverage onto the allocation of RM3.50bn under Budget 2022 for the development of infrastructure projects.

UOA Real Estate Investment Trust (UOAR) commenced its operations in December 2005 and has now expanded its property portfolio to 6 buildings spanned across Kuala Lumpur, Damansara Heights, and Bangsar South. Properties are located in strategic locations coupled with the alignment of interest with UOA Development Bhd granted few long-term competitive edges against its peers. We initiate coverage on UOAR with a BUY call and fair value of RM1.40, based on 14.0x P/E pegged to its forward FY23f EPS of 10.0 sen.

The proposed acquisition of ABSB will enable RHT to (i) construct additional tailings ponds or storage and waste rock storage on ABSB’s land, (ii) expand existing mining pit in Hulu Perak further eastward so that RHT will be able to mine additional tin resources within its own land and (iii) mine the tin resources within ABSB’s land. The proposed acquisition is expected to be completed by 3Q22.

Elsewhere, construction orderbook replenishment at RM433.6m in FY22 with an outstanding orderbook of RM399.8m (mainly from in-house projects) will keep the segment busy over the next 18 months. We expect the future orderbook replenishment to be mainly anchored by in-house projects in line with their expansion of i-Park developments.

We expect the coal fired thermal power plant in Vietnam to remain as a key profit driver in FY22f and the foreseeable future. The group also aims to strengthen the power-related business with 2 MoU signed in 2021 for the (i) potential collaboration on the development in renewable energy plants such as solar and hydropower in Sabah and (ii) development of 1,500-MW liquefied natural gas (LNG) power project in Vietnam. At the same time, we gather that the progress of LSS4 project remains well on track and is slated for completion in 1Q23.

Occupancy rates at Plaza OSK, Faber Towers and Atria Shopping Gallery remains relatively healthy will generate stable recurring income, while the construction segment will be supported by an outstanding orderbook of RM211.0m (for their ongoing property development projects). With Malaysia transitioning into the endemic phase, we reckon that the industry segment is expected to deliver improvement on the back of smoother construction work progress. We also note that the loan portfolio remains stable at RM906.0m.