Buy for quantum leap ahead
• Proxy to renewable energy with promising growth prospects
• Riding on booming theme parks in Asia; Shanghai Disneyland is the wild card
• Initiate with BUY and RM1.25 TP (66% upside)
We initiate coverage of Fitters with RM1.25 TP
based on SOP methodology. Fitters is a underresearched jewel with no
broker coverage at the moment. Its current valuation at only 5x FY13 PE
is a clear bargain on the back of 3-year earnings CAGR of 38% while
boasting solid 19% FY13 ROAE. Balance sheet is healthy with 22% net
gearing as at Dec11. FY13 is set to be a record year, premised on: (i)
property development progressive billing, (ii) palm oil mill capacity
upgrade to 90MT/hr (from 60MT/hr), (iii) commercialisation of green
Huge potential in renewable energy.
is the market leader of integrated fire-fighting business in Malaysia,
that manufactures, trades and provides installation services. However,
renewable energy has been identified as the next growth driver. Fitters
has commercialised its concept of sustainable palm oil mill by providing
zero-waste solution via dried long fiber plants and biogas power
plants. Its strong value proposition of additional income from palm oil
wastes and relatively short pay-back period of 4-5 years, is highly
attractive. Securing new green mill projects will be the immediate
catalyst for Fitters.
Shanghai Disneyland the wildcard.
Disneyland specialist theme works worth >RM100m is a potential
catalyst given Fitters’ approved vendor status. Malaysia booming theme
park development in Johor also provides huge untapped market.
Extra boost from property.
property development project in prime Setapak area (GDV RM400m) will be
a major boost to FY12-14 earnings amid strong take up for its SOHO
(100%), anchored by unbilled sales of RM120m as at 1Q12.
At A Glance
Issued Capital (m shrs) 216
Mkt. Cap (RMm/US$m) 163 / 53
Major Shareholders Dato' Wong Swee Yee (%) 32
Free Float (%) 67
Avg. Daily Vol.(‘000) 867
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