SPECIALTY pole maker Mestron Holdings Bhd has a solid start to 2022 as the group generated more orders than expected during the first five months of the year (5M CY2022) despite encountering COVID-19 disruption in 1Q CY2022.
Mestron recorded a total order book of RM17.5 mil during the 5M CY2022 period as the roll-out of telco infrastructure gathers speed. This is in line with the accelerated progress in the implementation of the National Digital Network initiative (JENDELA).
These order books came from various customers, namely Smartgen Technology Sdn Bhd, Hytro Vista Sdn Bhd and OCK Setia Engineering Sdn Bhd.
“We are excited about the group’s prospects as we have seen a sharp improvement in our order books during the first five months of this year,” Mestron’s managing director Por Teong Eng pointed out.
“The pick-up of these orders are supported by the faster roll-out of the telco projects following the re-opening of the economy.”
In a statement released by Digital Nasional Bhd (DNB) – the key driver for Malaysia’s 5G infrastructure development – various federal, state and local authorities and government agencies have helped to expedite the roll-out of 5G network during 1Q CY2022.
In fact, DNB chief technology officer Ken Tan has noted in a statement that these initiatives helped DNB to stay on track to meet its 5G coverage target of 37.9% of populated areas by end-2022.
The surge in momentum for the 5G roll-out is expected to benefit Mestron, as it helped the company generate its revenue mainly from sales of its standard poles and specialty poles within the telco segment.
The projects that Mestron was awarded during the 5M CY2022 period was under the JENDELA Phase 1 with the products expected to be delivered by August.
“It has been a busy year for us as we have won three contracts from three different telco infrastructure players,” revealed Por.
“These are just the ones that we have contracted in 2022 with the group looking forward to tapping the growing demand for specialty poles within the telco segment amid the roll-out of 5G network nationwide.”
According to Por, Mestron targets to win another RM20 mil worth of contracts over the next six months from the telco segment.
The strong demand will be supported by the roll-out of the 5G network in Malaysia. Por expects the group’s strong order books to sustain Mestron’s revenue growth for the rest of the financial year ending Dec 31, 2022. (FY2022).
Recall that the group’s revenue for 1Q FY2022 surged by 84.1% year-on-year to RM21.4 mil mainly due to an increase in sales demand for its standard poles and specialty poles. The increase in sales for its specialty poles is mainly driven by Mestron’s telco segment.
At 2.41pm, Mestron was up 0.5 sen or 1.5% to 34 sen with 50,059 shares traded, thus valuing the company at RM316.4 mil. – June 22, 2022
