KUALA LUMPUR: Kawan Renergy Bhd, which made a strong debut on the ACE Market, targets to achieve RM100mil in revenue this year.
Managing director Lim Thou Lai said the growth would be driven by renewable energy (RE), which is one of the group’s business segments.
The group is also optimistic in expecting a double-digit growth in its gross profit margins as it is focusing on acquiring high-yield job orders to provide better margins, Lim added.
Kawan Renergy is an engineering solutions provider.
Apart from RE, its other business segments are industrial process equipment and process plants.
Lim said the impending fuel subsidy rationalisation programme will serve as a boon rather than a disadvantage for the group’s RE business.
“When the government implements the fuel subsidy rationalisation, it will create more business opportunities for us,” Lim shared during a press conference after the listing ceremony yesterday.
He said the group’s wholly-owned RE subsidiary, Magenko Renewables (Asia) Sdn Bhd, had multiple power-purchase agreements in the pipeline.
The group is also looking to expand its RE and engineering business in the South-East Asian region, specifically in Indonesia.
Lim said contribution from the RE segment was currently small, but he foresees it gradually transforming into its biggest cash cow, forecasting revenue contribution (from RE) to be more than 50% in two years.
“There is significant potential in the demand for RE and co-generation plants, in line with Malaysia’s national energy transition ambitions to achieve net-zero emissions by 2050,” he added.
Kawan Renergy’s order book stood at RM72.9mil as of March 31, 2024.
For the first quarter ended Jan 31, 2024, the company reported a revenue of RM19.9mil and a net profit of RM4.2mil, achieving a net profit margin of 21.1%.
Over half of the revenue came from the industrial process equipment segment.
In the financial year ended Oct 31, 2023, it made a revenue of RM98.4mil with net profit coming in at RM13.3mil.
The stock opened yesterday at 45 sen per share or 50% over its initial public offering (IPO) price of 30 sen.
The share price closed at 46.5 sen with an intra-day high of 48.5 sen. It was also the most active stock with 148.54 million shares changing hands.