KUALA LUMPUR: Electrical engineering service provider HE Group Bhd's share price more than doubled to 43 sen a share, on its debut on the ACE market today.
It shares were the most actively traded hitting a high of 45 sen before settling at 40.5 sen at 9.28am, with 62.6 million shares changing hands.
HE Group holds a tender book valued at RM400 million as of January 2024, with 70 per cent to 80 per cent of the tenders concentrated in the semiconductor and Electrical and Electronic (E&E) sectors, while 10 per cent are related to data centres.
The majority of HE Group's revenue comes from providing services encompassing the design, supply, installation, testing, and commissioning of substations and power distribution systems for residential, commercial, and industrial structures.
Rakuten Trade in its note said the company aspires to evolve into a versatile provider of mechanical, electrical, and process utility (MEP) engineering services, with a focus on improving its internal capabilities.
"To facilitate this objective, it is strategising the updating of its Certificate of Registration of Contractor with Construction Industry Development Board (CIDB), specifically for offering integrated MEP engineering services."Consequently, the company plans to strengthen its in-house expertise by recruiting a team of seasoned mechanical engineers, chemical engineers, and process engineers."This team will specialise in the design and engineering of mechanical and process utility systems," he added.
Furthermore, the firm intends to expand its footprint in Malaysia through the establishment of offices in Kulim, Kedah, and JB, aiming to enhance customer and technical support services promptly.
Rakuten Trade said this expansion is viewed as a catalyst for tapping into potential business opportunities in the specific states.
"Furthermore, HE Group is strategising to extend its industry reach to include data centres," the note said.
Rakuten Trade projects a core net earnings of RM14.6 million in the financial year 2024 (FY24) and RM17 million in the financial year 2025 (FY25) for HE Group.
Rakuten Trade has issued a 'Buy' recommendation for HE Group, suggesting a fair value (FV) of 43 sen.