KUALA LUMPUR: Integrated pipe manufacturer Engtex Group Bhd expects its earnings growth to pick up in the second half of the year on the back of robust construction and development activities in both the country’s public and private sectors.

“We stand to benefit from various infrastructure projects by the government and private property developments because all of them require pipe-laying work,” said its group managing director Datuk Ng Hook (pic).

Among the major pipe-laying projects up for grabs for Engtex next year are the Langat 2 Selangor project, the Malaysia-China Kuantan Industrial Park development, the Petronas Rapid project in Pengerang, and Pengurusan Aset Air Bhd’s projects in six states in the peninsula, said Ng.

He said there is “tremendous potential” for water pipe replacement works throughout Malaysia, boosting demand for the ductile iron and mild steel that Engtex manufactures.

“If you look at Selangor alone, it has about 6,423km of pipes which need to be replaced. A project like that is worth RM1 billion in just one state,” Ng said.

Outside manufacturing, Engtex is in property development to “enhance the company’s profit and revenue” but it does not plan to purchase new land bank or aggressively develop new properties for sale.

“Our company policy is to cap revenue contribution from the property development business at 20% as we still prefer to focus on our core business of manufacturing and distributing pipes,” Ng added.

Engtex’s property development plans include launching a 21-storey commercial suite building in Kepong by end-2014, a proposed development of beach villas, hotel and serviced apartments in Kuantan, and a proposed residential development in Rawang.

For the third quarter of 2014 ended Sep 30, 2014 (3QFY14), Engtex’s net profit jumped 33.2% to RM13.86 million from RM10.4 million a year ago. Its revenue grew 14.5% to RM301.8 million from RM263.5 million a year ago.

In the cumulative nine-month period (9MFY15), Engtex registered RM39.17 million in net profit, marginally growing from RM38.47 million in the same corresponding period last year. Revenue stood at RM893.4 million, a 10% increase from RM812.2 million last year.

Engtex closed 6 sen or 3.23% higher yesterday at RM1.92, giving it a market capitalisation of RM380.2 million.

This article first appeared in The Edge Financial Daily, on November 26, 2014.