Eita Resources Berhad (Summary)

Introduction

EITA is an investment holding company based in Malaysia. It operates in three segments: Manufacturing, Marketing & Distribution and Services. Eita Resources Bhd was incorporated in Malaysia on 19 August 1996 as a private limited company under the name of Pacific Astro Sdn Bhd. The company changed its name to EITA Resources Sdn Bhd on 9 October 2009 and converted into a public limited company on 11 January 2010.

Segments details:

Manufacturing Segment (58%)

  • Elevator System

EITA’s contract from MRT 1 is projected to finish by 1Q2017. The chance of getting the MRT2 project increases if EITA is able to complete the MRT1 project on time and without any error.

  • Busduct System
  • Other E&E products

Marketing and Distribution segment (32%)

  • Power distribution equipment

Acquisition of TCSB allows EITA to venture into high voltage power distribution system. This enables EITA to bid the contracts from TNB to set up the ~500kV power distribution and transmission system.

  • Control equipment
  • Network and security system equipment
  • Other E&E components

Services (10%)

  • Maintenance of elevator systems
  • Electrical and security system solutions

Recent Developments:

  1. CAPEX from TNB will affect EITA power distribution business since it started to provide full coverage of power distribution equipment. Fitch expects TNB to spend RM46 bil between FY16 to FY19.
  2. New busduct products in 2015: Aluminum Housing Busduct system and Cast Resin Busduct system.
  3. JV Sigriner Automation (Mfg) Sdn Bhd was set up to produce Elevator Control systems for both the local and overseas markets.
  4. Manufacturing order book stands at RM 139 mil. (Elevator RM 107mil & Busduct RM 32 mil)
  5. Services segment is a high margin business which provides the group recurring income and recession proof. The services segment contributes positively and has been increasing in recent years.

Key Risks:

  1. Slowdown of property development.
  2. Fail to secure MRT2 elevator system contract.
  3. Delay in delivering any projects.
  4. Foreign currency exchange risk.

Key Opportunities:

  1. Being one of the providers for MRT1 stands a better chance in MRT2. (MRT2: lesser competitors as tenderers will be appointed rather than open to public in MRT1)
  2. Being a full-fledged power distribution equipment provider, the group is able to capture more contracts from extra high voltage (~500kV) to low voltage (230V~).
  3. Elevators, busducts, fire-resistant cables are complements and necessary for industrial buildings.
  4. TNB high CAPEX provides opportunities to EITA’s power distribution system to expand quicker.
  5. Urbanization of South East Asia countries may increase the needs for elevator systems as more high rise buildings are built.
Stock Code: 5208

EITA website

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s