KUALA LUMPUR (April 17): Hong Leong IB Research has valued Engtex Group Bhd at RM1.25 and said it forecasted Engtex’s earnings to grow by CAGR of 7% from FY14 to FY17.
Engtex is involved in the wholesale and distribution of pipes, valves and fittings, manufacturing of water pipes and wire mesh and property development.
In a note today, the research house said among the catalysts for Engtex were the upcoming 11th Malaysia Plan that will ramping up the demand for water pipes, and the pipe replacement program that will provide the next earnings step-up for the group.
“We have forecasted Engtex’s earnings to grow by CAGR of 7% from FY14 to FY17 mainly due to increased demand for its water pipes with stable growth from wholesale and distribution.
“We derived the value of Engtex at RM1.25 based on P/E multiple valuations, pegged to 7.0x P/E FY16 EPS of 17.7 sen/share, based in its historical 1-year forward P/E,” it said.