Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Sept 25): Pestech International Bhd’s wholly-owned subsidiary Pestech Sdn Bhd has received a letter of acceptance from Tenaga Nasional Bhd to construct a 500/275kV Yong Peng East, Johor backbone main substation, at a cost of RM134.4 million.

In a filing with Bursa Malaysia today, Pestech International said the project will enable the national grid 500kV backbone connectivity from Yong Peng East to Lenggeng, Negri Sembilan and futher access to Ayer Tawar in Perak.

“In general, the National Grid in the Peninsular is operated at voltage levels of 500kV, 275kV, 132kV and 66kV. As such, the project is slated under the highest transmission voltage level in Malaysia.

“When ready, the project will form the transmission line infrastructure for the Peninsular power grid system,” said the group, adding that the construction is expected to be completed in 1,085 days.

According to the Malaysian Energy Commission on the 2014 electricity supply industry outlook in Peninsula Malaysia, demand for electricity is projected to grow at a rate of 3% to 4% annually, which requires transmission system to be further upgraded and expanded.

Peak demand is projected to surpass the 25,000MW mark by 2032, while total installed generation capacity connected to the transmission system will be more than 30,000MW — an increase of 40% from generation capacity in 2014.

Quoting Wikipedia, Pestech International said the 500kV transmission system, starting in 1995, was the single largest transmission system to be developed in Malaysia.

“Phase One involved the design and construction of the 500kV overhead transmission lines from Gurun, Kedah in the North, along the west coast to Kapar, in the central region and from Pasir Gudang to Yong Peng in the south of Peninsular Malaysia,” it said.

Pestect International (fundamental: 1.3; valuation: 1.1) added that in the long run, the 500kV transmission lines would be the backbone for transmission system for inter-regional power transfer and possible interconnection with other systems.

The project would have no material effect on the revenue and earnings of the group for the financial year ending June 30, 2016, but is expected to contribute positively to its future earnings and net asset per share.

“Pestech International does not foresee any exceptional risk other than the normal operational risk associated with the project. The company will take necessary steps to mitigate the risks as and when it occurs,” it said.

At 12.30pm, Pestech International increased eight sen or 1.39% to RM5.85, with 41,300 shares done, for a market capitalisation of RM1.07 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

      Print
      Text Size
      Share