KPower slowly gains foothold in healthcare segment

This is on the heel of the award of a RM24 million contract for the supply of polymerase chain reaction (PCR) kit (more widely known as Covid-19 test kits) last month. AmInvestment Bank

KUALA LUMPUR: KPower Bhd (KPower) is slowly gaining a foothold in the healthcare segment, a er securing a contract for the supply of airbag or breathing bag for GeNose Covid-19 and GeNose Covid-19 test machine to Pt Biotech Maju Sejahtera (PT BMS).

In a filing on Bursa Malaysia, KPower announced that its wholly-owned subsidiary KPower Healthcare & Technologies Sdn Bhd had on February 15, 2021 accepted the le er of award from PT BMS for a minimum total contract price of US$12.025 million (equivalent to approximately RM48.635 million).

The award is effective for a period of 12 months from the date of the acceptance of the award.

“This is on the heel of the award of a RM24 million contract for the supply of polymerase chain reaction (PCR) kit (more widely known as Covid-19 test kits) last month,” AmInvestment Bank Bhd (AmInvestment Bank) said.

“While these developments show that KPower is slowly gaining a foothold in the healthcare segment, the contribution from the new business will remain insignificant during our forecast period and hence we are keeping our forecasts.”

As such, AmInvestment Bank’s core net profit forecasts for financial year 2021 (FY21F), FY22F and FY23F remained at RM31.3 million, RM45 million and RM69.9 million, respectively.

The research firm was more encouraged by KPower having bagged new renewable energy engineering, procurement, construction and commissioning (EPCC) contracts of RM543.3 million year to date (YTD) in FY21F (June), boosting its outstanding construction order book to RM1.6 billion.

“We maintain our assumption for construction job wins of

RM1.4 billion annually in FY21F to FY23F (which is a tad more conservative against KPower’s guidance for RM2 billion for FY21F).”

Overall, AmInvestment Bank continued to like KPower for the bright prospects of renewable energy, underpinned by the global trends towards clean and sustainable energy and carbon neutrality to combat climate change and the group’s strong earnings visibility and growth potential underpinned by its RM1.6 billion order backlog on green utility projects, coupled with a massive tender book of RM3.2 billion.

Additionally, the research firm highlighted that KPower is a strong contender for EPCC packages under the one gigawa fourth cycle of the large-scale solar (LSS4) project locally.