George Kent (Malaysia) Bhd
(Feb 4, 89 sen)
Not rated: George Kent is an engineering group specialising in the manufacture of engineering products and engineering construction activities. In May 2007, George Kent embarked on a five-year transformation programme, which streamlined its businesses into two core divisions.
Its meters, manufacturing and industrial (MMI) division manufactures and supplies water meters, parts and non-meter products under the “KENT” brand to the water-related sector in Malaysia. It is also an original equipment manufacturer (OEM) of water meters for Elster (one of the largest water meter suppliers in the region) in several overseas countries, including Singapore, Hong Kong, Thailand, the Middle East, Papua New Guinea, Australia, Sri Lanka, Kenya, South Africa and the UK.
George Kent’s infrastructure investments, water and construction (IWC) division undertakes turnkey project management for the mechanical and electrical (M&E) component of water and wastewater infrastructure projects in Malaysia. Also, George Kent holds a 19% stake in PNG Water Ltd, which has a 22-year concession to supply processed water to Port Moresby, Papua New Guinea.
Upon the completion of its five-year transformation plan, George Kent is targeting to increase its annual turnover to more than RM500 million (from RM106.9 million in FY01/09).
To achieve that, it is planning to: (1) expand its market reach and product range for water meters as it sees potential demand growth for water meters in the region; (2) raise its construction order book to RM1 billion by bidding for more construction projects, in particular, water/wastewater-related and healthcare projects under the 10th Malaysia Plan; and (3) acquire water and wastewater concessions overseas.
In terms of valuation, George Kent is trading at an annualised FY01/10 price-earnings ratio (PER) of 11.3 times, which is relatively stretched compared to the water-related players’ average PER of 8.2 times. — RHB Research Institute, Feb 4
This article appeared in The Edge Financial Daily, February 5, 2010.