KUALA LUMPUR: Oil and gas (O&G) support service provider Steel Hawk Bhd saw its shares surge by up to 150 per cent, hitting 36 sen per share within the first hour of its ACE Market debut today.
The stock traded with a volume of 62.4 million shares, making it one of the most actively traded stocks today.
Rakuten Trade Sdn Bhd said Steel Hawk has demonstrated robust financial performance, with its significant revenue growth driven by new and ongoing contracts.
It said the financial leverage is manageable, with net gearing of less than 0.1 time as of the first quarter financial year 2024 (1QFY24),
"We expect this level to be maintained post initial public offering (IPO)," it said.
Steel Hawk is expanding its fabrication capacity by constructing a new facility, Teluk Kalung Facility 2, which will increase its total capacity fivefold.
The new facility will enable more extensive steelwork fabrication, along with in-house blasting and painting, reducing dependence on third-party subcontractors, optimising turnaround times, and enhancing cost efficiency.
"Steel Hawk is well-positioned for future growth, supported by its strategic expansion initiatives and diversification into the renewable energy sector.
"The company's strong ongoing projects and contract backlog are expected to drive earnings growth," it added.
Rakuten Trade anticipates Steel Hawk to post net earnings of RM8.7 million and RM9.5 million for financial years 2024 and 2025 (FY24/FY25), respectively.
The firm has issued a 'Buy' recommendation with a fair value (FV) of 28 sen, based on a 12 times multiple of peers with similar market capitalisations, relative to FY25 earnings per share (EPS).