UNITRAD - Building materials company that related to Data Centres
Background: Unitrade Industries Bhd, is one of the largest Malaysian homegrown wholesalers and distributors of building materials, has over 6,000 SKU in their building materials portfolio consisting of pipes, valves, fittings and accessories for M&E related works.
CATALYST:
1. Malaysian Iron and Steel Industry Federation (Misif) president Datuk Lim Hong Thye see positive growth this year for steel consumption, to grow to 8.3 million tonnes this year, mainly driven by construction of data centres and the expansion of the semiconductor industry.
2. Deputy Investment, Trade and Industry Minister Liew Chin Tong said MITI is working with the Construction Industry Development Board (CIDB) and the Works Ministry looking at ways to enforce more use of local steel products for government projects.
4. Additionally, Unitrade stands to benefit indirectly from the expected influx of data centre projects into the country, as the shell and core sections of data centres utilise standard building materials that form part of Unitrade’s existing portfolio of over 6,000 building material stock keeping units or SKUs. Beyond data centres, the unveiling of the National Semiconductor Strategy in May 2024 also calls for substantial investments into the semiconductor industry, that would include building new plants which is a boon for a player like Unitrade.
https://www.unitrade.com.my/our-products/
5. Recent acquisition of Intergreen Holdings Sdn Bhd to acquire a 51% stake in Intergreen Metals Sdn Bhd in January this year has paved the way for its entry into the metal recycling industry with a guaranteed net profit totaling RM45mil by Intergreen over three financial years, which would further strengthen the group’s earnings and in line with our ESG agenda to uphold sustainability and green practices. The Group’s 4Q2024 revenue increased by 27.6% year-on-year (“y-o-y”) to RM478.2 million from RM374.7 million in 4Q2023 which was chiefly driven by newly added segment metal recycling contributing RM205.8 million or 12% of total revenue.
6. Surge in solar installations would greatly benefit Unitrade as a wholesale distributor of solar systems, positioning it to capitalise on the expanding market demand for solar equipment which is primarily driven by government initiatives like the Corporate Green Power Programme with an 800 megawatt (MW) capacity and a scheduled commercial operation date by the end of 2025. The upcoming large-scale solar five (LSS5) programme, the largest LSS programme thus far with a two gigawatt capacity will further drive solar installations with operations scheduled to commence in 2026.
7. Unitrade in April this year entered into a collaboration agreement with Huawei Technologies (M) Sdn Bhd and JJ-LAPP (M) Sdn Bhd for distribution of Huawei Digital Power-Smart PV solutions across residential as well as commercial and industrial sectors. Unitrade has plans to introduce solar ownership plans, offering customers and its employees affordable and flexible financing options to reduce the upfront cost of solar panel installation.
https://theedgemalaysia.com/node/708890
https://eshop.jj-lapp.com/jjlappmalaysia/en/brand-huawei
8. Back in July 2023, Unitrade, through their wholly owned subsidiary Unitrade United Sdn Bhd, signed a MOU with Invest Kedah Bhd to develop modular housing systems for the centralised labour quarters (CLQs) in Kedah. The CLQs helps companies with sizable employment headcount to comply with Workers’ Minimum Standards of Housing and Amenities Act 1990 (Act 446). A set of Unitrade’s modular houses with a 130-worker capacity takes up 198.75 sq m of floor area. In contrast, conventional cabins occupy more than double the space at 448 sq m for the same capacity.
9. Unitrade Industries Bhd has acquired a two-acre land worth RM7.84 million to develop centralised labour quarter (CLQ) solutions located in Sungai Buloh, Selangor.
10. FSBM Holdings Bhd’s wholly owned subsidiary FSBM MES Elite Sdn Bhd has signed agreements related to business opportunities involving power backup solutions with Syarikat Logam Unitrade Sdn Bhd and T-Parus Trading Co Ltd to explore opportunities and expand market access for the technology known as T-Parus Technology Voltage Sag Protector to ensures uninterrupted power supply, safeguarding sensitive electronic equipment from damage. This expansion will include suitable supporting equipment for both semiconductor frontend and backend manufacturing processes which align with the Madani government’s ambition to position Malaysia’s semiconductor industry to move up the value chain.
11. AREA Real Estate Advisory Sdn Bhd (AREA) will develop a 60.7-hectare land within the Delapan Special Border Economic Zone (Delapan SBEZ) in Kedah, exclusively for data centres with a gross development value of RM15 billion. With a good relationship between Invest Kedah Bhd and Unitrade, it will benefit Unitrade when Kedah develope data centres soon.
Technical Analysis
EP 0.265-0.27
SP 0.255
RST 0.285
TP 1 0.30
TP 2 0.32
TP 3 0.34
Holding period: 6 months
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a) Trend: Break downtrend line
b) Cross above MA5,10,20
c) RSI and Stoschastic pointing up
d) MACD cross up but below 0 central line
REFERENCE:
https://www.thestar.com.my/business/business-news/2024/07/01/higher-earnings-expected-for-unitrade
Disclaimer : The above opinion is never intended to be a BUY SELL CALL. The above article purely for education purpose base on observations, chart and data. Thank you.
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