KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) expects Mega First Corporation Bhd to see stronger growth in the second half (2H) of 2024.
This is in anticipation of a higher energy availability factor of 98 to 99 per cent from the Don Sahong Hydropower plant during the wet period and a normalised margin from the resources segment.
According to PublicInvest, a new power purchase agreement (PPA) and concession agreement (CA) that encompass all five turbines are expected to be concluded by end-2024.
"We understand that the key issue to iron out is related to the slow payment for the remaining 10 per cent in local currency.
"Accounting-wise, the PPE will be transferred to service concession assets once it is successfully executed," it said in a note.
Meanwhile, PublicInvest said the 50 per cent owned oleochemical business, Edenor Technology, is expected to turnaround in 2H, led by higher capacity utilisation.
In addition, the firm said Mega First's proposed acquisition of a piece of commercial land in Setia Alam, which is intended for a hospital building, is in the final stage after securing the comprehensive clinical assessment of practice from the Ministry of Health.
"Under the plan, Mega First will hold a controlling interest in the hospital while the management will be run by a group of professional doctors.
"The hospital will take up to 4.5 years before it can commence operations.
"Overall, we maintain 'Outperform' with an unchanged target price of RM5.36 on the stocks," it added.