not vested
WHILE some investors find the company too diversified for their liking, there are a number of catalysts for Fitters that makes the company one of the smaller ones to watch in 2014.
First could be a listing of its wholly-owned renewable energy unit Future NRG Sdn Bhd, say insiders. Fitters core business is in fire-fighting.
The catalyst in this segment is a potential merger to form the region’s largest fire-fighting business.
However, this was supposed to have taken place earlier with Singapore’s Deluge Fire Protection Pte Ltd but some delays have occurred. Still, a third and increasingly significant division is property, that produced some attractive profits in the company’s last reported quarter.
In announcing its good Q3 FY2013 earnings last November, Fitters also said that it had entered into a Memorandum of Understanding with Molecaor Technologia S.L. of Spain to penetrate the market of PVC pressure pipes in Malaysia and other South-East Asian markets.
Insiders say that this could be a lucrative market for Fitters if executed well, considering that the Spanish company holds patents to state-of-the-art piping that hits the right price points and is the most suitable replacement for aging water pipes around the region. Banking sources said that Fitters was looking to float Future NRG in Malaysia or Singapore, which would raise funds for future expansion.
Renewable energy companies have been enjoying keen investor interest in markets in the United States and the UK.
Future NRG is involved in renewable, alternative and waste-to-energy projects such palm oil green mills, biomass plants and biogas capture plants.
Catalysts
- Unlocking of value from its diversified base via M&As.
- Dividends could be in the offing.
- Possible overseas listing of renewable energy unit and steady earnings growth.
Risks
- Execution risks and delays in unlocking value and property market downgrade.
Source: The Star