ONE may wonder how the Government’s push for the 5G services roll-out in Malaysia will be positive for Mestron Holdings Bhd, a company which aims to revolutionalise the conventional lighting in tandem with consumers growing expectation towards modernisation and urban instinct.
The answer lies in how the company has reported a stronger financial performance for its 1Q FY2021 ended March 31, 2021 by virtue of higher sales of specialty poles which mainly come under its telecommunication segment.
The Digital Nasional initiative which is expected to invest a circa RM15 bil over the next decade is poised to fast track the roll-out of 5G services by this year-end.
“A faster roll-out of 5G network in Malaysia is a positive catalyst for the group as this would further drive the demand for our specialty pole products given high masts and telecommunication monopoles are necessary in the development of telecommunication infrastructures,” projected Mestron’s managing director Por Teong Eng.
“The strong growth seen in the 1Q FY2021 is in line with our expectations as we have seen an increase in the demand for our specialty poles.”
According to Mestron’s filing with Bursa Malaysia, its net profit during the period under review jumped by 86.7% year-on-year (yoy) to RM1.5 mil from RM800,000 in the previous year’s corresponding quarter.
Mestron also recorded an increase of 4.5% yoy in its revenue to RM11.63 mil from RM11.13 mil ,driven mainly by proceeds from the specialty poles. The higher margin for the specialty poles as well as the better implementation of cost-control measures have led to strong double-digit growth in its net profit.
Given that the Malaysian market remains as the largest market contributor to the group’s revenue at 93.3%, the strong growth for its specialty pole products in the country will enable Mestron to accelerate its growth for FY2021.
Por expects demand for the group’s specialty pole products which was evident in 1Q FY2021 to pick up further for the rest of this financial year.
“We are optimistic that the group will see a strong and robust growth for this year as the faster roll-out of 5G network would drive demand for our products,” he projected.
“However, we remain cautious over the potential disruption from a potential lockdown in the country following the surge of COVID-19 cases recently.”
At the close of today’s trading, Mestron was unchanged at 40 sen with 14.42 million shares traded, thus valuing the company at RM363 mil. – May 28, 2021
