Executive Summary
WESTRVR engages in M&E (mechanical and electrical) engineering in Malaysia specialising in electrical engineering, air-conditioning and mechanical ventilation (ACMV), intelligent building solutions, and the manufacturing of electrical panels and distribution boards and generated RM122.7m in FY24 revenue which commands a 1.4% market share.
Projected core earnings are expected to demonstrate stable growth, with two-year CAGR of 38.7%, driven by an expanding orderbook and improved margins from new projects and manufacturing operations.
We recommend subscribe to WESTRVR IPO with a target price of RM0.44 (a 16.2% potential capital upside from the IPO price), based on a P/E multiple of 10.0x, pegged to the FY26F core EPS of 4.4 sen.
Key Investment Highlights
Established M&E Engineering Specialist. WESTRVR is well equipped with 20 years of experience in Malaysia's M&E engineering sector, specialises in electrical engineering and ACMV services, and has expanded to offer intelligent building solutions alongside the manufacturing of electrical panels and distribution boards. Offering end-to-end services from design to commissioning, the Group delivers cost-effective, integrated solutions, enhanced by its in-house developed Neutron IoT system for real-time monitoring and control of M&E sub-systems, driving energy efficiency and operational performance. Certified with Class A by the Energy Commission (ST) and G7 by CIDB, WESTRVR is qualified for projects of any scale nationwide, reinforcing its strong market position and competitive edge in Malaysia’s M&E industry.
Orderbook Strength and Tender Momentum. WESTRVR is equipped with 26 ongoing contracts with an unbilled orderbook of RM247.3m, to be recognised progressively up to FY27. The Group has also submitted tenders for 101 projects valued at RM1.03bn, primarily in Selangor and Kuala Lumpur with an expected win rate of 9.0%. Successful bids will support the replenishment and growth of the Group’s orderbook to provide revenue visibility in the upcoming years.
Manufacturing Capacity Expansion to Drive Growth. WESTRVR operates a manufacturing facility in Bandar Teknologi Kajang, Semenyih, with a production capacity of 1,317 units, running at a 95.7% utilisation rate in FY24. To accommodate growing demand and capture greater business opportunities, the Group plans to acquire a land in the Klang Valley to house a new integrated manufacturing facility and warehouse, covering 35,000 sqf. The move will ramp up production capacity by up to 300.0% over the next three years, enhance operational efficiency, and reduce costs through bulk procurement. The Group will allocate RM10.0m from its IPO proceeds to fund this expansion, expected to be completed within 36 months post-IPO.
Seizing M&E Market Opportunities. The value of M&E engineering works in Malaysia has grown significantly from RM3.9bn in 2019 to RM8.5bn in 2024, reflecting a robust CAGR of 16.9% during the period. Similarly, the manufacturing of electricity distribution and control apparatus, including electrical panels and distribution boards, has doubled from RM7.0bn to RM14.2bn over the same period, at a CAGR of 15.2%. The M&E engineering market is projected to expand further to RM10.9bn by 2026, driven by growth in the residential and commercial property sectors, increasing end-user industry demand, and rising domestic and foreign investments. WESTRVR is well-positioned to leverage this growth, capitalising on its expertise and manufacturing capabilities to strengthen its market presence and ensure sustained growth.
Valuation & Recommendation. We recommend subscribe to WESTRVR with a target price of RM0.44 (16.2% total potential upside from the IPO price), based on a 10.0x P/E ratio pegged to FY26F EPS of 4.4 sen. The valuation represents a slight premium to the Group’s peers, CBHB (9.0x P/E) and CHB (6.5x P/E), reflecting the Group’s position as one of the leading M&E engineering service providers and its in-house manufacturing capabilities that support its M&E projects.
Disclaimer
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Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.077849 | 4.109407 |
| EUR | 4.802781 | 4.811175 |
| CNY | 0.580550 | 0.581565 |
| HKD | 0.523962 | 0.528035 |
| SGD | 3.162627 | 3.187313 |