U-Li to see stronger growth in 2HFY18

KUCHING: United U-Li Corporation Bhd (U-Li) is expected to see a stronger second half of the financial year 2018 (2HFY18), driven by infrastructure projects as well as its overseas sales.

In a report, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) noted that U-Li had incurred high start up costs due to its Nilai plant, which started operations in early 2017.

As such, it believed it could be a better year for the group given that the new plant is almost fully utilised.

“We expect FY18F to be a better year than FY17F as the company had incurred high start up costs for the Nilai plant.

“We believe that U-Li will reap the fruits it sowed especially towards the second half of the year from the picking up of infrastructure projects as well as overseas sales,” it opined.

With that, the research team expected U-Li’s FY18F earnings to be 71 per cent higher than FY17F’s.

Meanwhile, it pointed out that the higher output from its plant in Nilai is expected to support sales coming from the overseas market.

“U-Li is now able to grow its export segment as previously it could only focus on the local market due to certain processes that are outsourced.

“It is now able to fulfil some of these requirements in-house from the ramping up of the Nilai plant facility,” it highlighted.

With that, MIDF Research estimated that export sales could contribute about 30 per cent to its revenue from 20 per cent previously.