HE Group Berhad
Tue, 16-Jan-2024 10:20 am
by Kenneth Leong • Apex Research

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HEGROUP (0296)

Target Price (RM)

RM 0.36

Recommendation

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  • HE Group is an electrical engineering service provider focusing on power distribution systems to end-users across various industries, commanding 2.9% market share in the electrical installation industry in 2022.
  • We project growth in core earnings to be supported by (i) recognition of balanced outstanding orderbook of RM211.9m, (ii) orderbook replenishment in subsequent years at approximately RM200-300m per annum, and (iii) expansions to northern and southern regions following the setting up of Kedah and Johor physical offices.
  • HE Group is valued by pegging FY25F core EPS of 3.3 sen to PE of 11.0x, leading to a FV of RM0.36 (28.6% potential upside from IPO price).
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