RESINTECH Bhd, a Main Market-listed leading player in plastics pipes, water tanks and fittings manufacturing, is poised to benefit from the Malaysian government’s push to modernise the water piping landscape and overhaul the water piping infrastructure.
Under the framework of the 12th Malaysia Plan (12MP), the Malaysian government has outlined a comprehensive agenda for pipe replacement programmes.
This ambitious initiative aims to significantly reduce non-revenue water (NRW) from 34% in 2020 to 25% by 2025. This effort is particularly critical given that an estimated 70% to 75% of current NRW is attributed to leaks, pipe bursts and damaged fittings.
“The national reinvigoration of water piping infrastructure and the aggressive targets to curtail NRW rates present an exciting opportunity for Resintech,” commented Resintech’s managing director Datuk Dr Teh Kim Poo.
“As key contributors to this infrastructural shift, we anticipate significant earnings growth in the ensuing years.”
As Malaysia’s largest high-density polyethylene (HDPE) pipe manufacturer, Resintech has displayed an impressive feat, positioned well to receive around RM15 mil of HDPE pipe orders from Pengurusan Aset Air Bhd (PAAB) which is tasked to develop the nation’s water infrastructure in Peninsular Malaysia and the Federal Territory of Labuan.
This reflects the group’s role in the nation’s water infrastructure augmentation.
To date, Resintech is operating at 80% of its capacity for the manufacturing of HDPE pipes. With strong demand underway, the group is also exploring opportunities to expand capacity and install new machines across its seven factories – two located in Selangor, two in Sabah, two in Sarawak, and one in Indonesia.
“Our remarkable performance in securing contracts and the subsequent financial uplift showcases Resintech’s resilience and capability in navigating a competitive landscape,” Teh pointed out. “We are well-positioned to leverage the burgeoning opportunities arising from the national infrastructure overhaul.”
Additionally, Resintech has commenced the first quarter of its financial year FY3/2024 on a high note with the group’s revenue posting a 19.3% year-on-year growth to RM25.15 mil for the 1Q FY3/2024 period ended June 30, 2023. Notably, the company’s net profit experienced a significant surge, reaching RM1.31 mil or more than doubling the RM538,000 in 1Q FY3/2023.
According to Teh, the strong earnings reflect the rising demand for the group’s products and its strong foothold in the industry which is backed by a commendable track record.
Rsintech closed up 1.5 sen or 3.12% to 49.5 sen on Friday (Oct 6) with 242,600 shares traded, thus valuing the company at RM97 mil. – Oct 9, 2023