Cable re-connect

This stock was forgotten, well, almost. Today its stock price had a mini sprint to life. I knew of some people had bought this stock in early of the year in anticipation of good results showing for 2013 but its result failed to inspire. Now we are entering into second half of the year. This time, there is a stronger belief that its earning will inspire. Certain key personnel of company had taken position in the stock some time back albeit quietly and that is a telling sign.

 

Today 16.6.2014 the company announced that they will be buying 2 major cables producer companies. It is no brainer why the company embarks on such an exercise. Let's relook at what the company has in its order book and/or soon to be in their order book.

 

1) 500kV transmission line contracts. 2 of the 4 packages worth RM619 million are already in hand. The other 2 packages were awarded to other contenders. But, and it is a big but, these 2 contenders have to buy cables from someone in order to execute the jobs. Guess from who.

 

2) High chance to get a big slice of the contract on electrical works from the state government.

 

3) To clinch more jobs related to hydropower projects because of their strategic partnership with SEB.

 

4) Awarded with power contract in neighbouring country which can be viewed quite similar to IPP contract that we used to call here.

 

5) More contracts from TNB to improve transmission service which is said to be worth over RM2 billion.

I am comfortable with my investment in this company. Let's see how things pan out by end of this year which is only some six months from now.

Its price closed at RM1.54 on 16.6.2014.