Saliran Group Berhad - Essential Piping Connectivity
Tue, 25-Feb-2025 07:13 am
by Team Coverage • Apex Research

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SALIRAN (0346)

Target Price (RM)

0.340

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Executive Summary

  • SALIRAN operates from its warehouses and manufacturing facilities in Puchong, Selangor and commands a 4.4% market share in Malaysia’s pipes, fittings, flanges, and steel products industry, based on revenue of RM243.2m recorded in FY23.

  • Expansion of storage capacity through the acquisition of Puchong Premise 3 supports business growth, alongside plans to establish a sales office in Indonesia within 42 months post-listing.

  • We recommend subscribe to SALIRAN’s IPO with a target price of RM0.34 (26.3% total potential upside from IPO price) based on P/E multiple of 8.0x pegged to FY26F core EPS of 4.2 sen. 

 

Key Investment Highlights

Established player in the pipes, fittings, and steel products industry. Over the years, SALIRAN has built a strong presence in Malaysia’s pipes, fittings, flanges, and steel products market, commanding a 4.4% market share in FY23 based on revenue of RM243.2m. The Group serves diverse industries, with key revenue contributions from oil and gas (86.2%), building materials (3.9%), and palm oil refining (3.3%).

 

Expansion of storage capacity and regional footprint. To support business growth, SALIRAN expanded its storage capacity in 2024 by 224.9%, bringing annual storage capacity of 391,104 sqf through the acquisition of Puchong Premise 3, enhancing inventory management and operational efficiency. Additionally, the Group plans to establish a sales office in Indonesia within 42 months post-listing, tapping into the country's growing demand for pipes, fittings, and flanges. 

 

Strong industry growth drivers. The pipes, fittings, flanges, and steel products industry is poised for expansion, driven by the growth of Malaysia’s oil and gas sector (3Y historical CAGR +1.5%), increased demand in building materials and palm oil refining, and rising foreign direct investments. Also, higher capital expenditures and industrial growth will further boost demand for steel products and piping solutions. 

 

Valuation & Recommendation. We recommend subscribe to SALIRAN’s IPO with a target price of RM0.34 (26.3% potential upside from the IPO price) by pegging its FY26F core EPS of 4.2 sen to PE multiple of 8.0x. The assigned P/E is in line with selected peers that are in the supply and distribution of pipes, fittings, flanges, and steel products industry listed on Bursa Malaysia. 

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