Friday, September 27, 2013

Weida - diversification into property development

The Sarawak based company is planning to make inroads into Peninsular Malaysia. It has a two prolonged plan to expand its presence there – through its manufacturing segment a diversification into property development.

Currently (Sept 2013), it derives 78% of its revenue from Sabah and Sarawak.

Its manufacturing division largely caters for the water treatment sector, in which it produces more than 200 types of building materials.

It is also diversifying into property development segment.

The company has over the years built a steady recurring income source from its provision and maintenance of water systems as well as the lease of telcos towers.

Its recurring income stream accounted for about 50% of its revenue in FY2013.

With the diversification into property development, its earnings portfolio is expected to change in the next five years from 2013.

It relies on long term contracts in the telecom and water treatment sectors. The estimated net rental income for this division in the next five years from 2013 will be about rm70 million.

In the water sector, it receives fixed income from long term contracts for the management, operations and maintenance of three septic sludge treatment plants in Kuching, Sibu and Miri.

The concession period for each of these three contracts is 25 years. The estimated concession income in the next five years from 2013 will be about rm60 million.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.