KUALA LUMPUR: Kelington Group Bhd climbed in early trade Thursday after securing a RM45mil contract in Singapore.

       The engineering solutions provider rose 0.83%, or 10 sen to RM1.21 at 9.35am.

       Kelington has secured a RM45mil contract to undertake Ultra High Purity (UHP) works for GlobalFoundries Inc’s new semiconductor fabrication plant in Singapore.

       The contract will commence immediately and is slated to be completed by July 2022.

       With the new contract, Kelington’s outstanding order book has increased to RM523mil.

       Year-to-date, Kelington said it had clinched approximately RM264mil of new orders, inclusive of the latest contract win.

       Kenanga Research is positive on this development as it strengthened its belief in Kelington’s competency and competitive edge among peers.

       Including the recent award, KGB has secured RM264mil job wins in 2021 while its order-book has ballooned to RM523mil, Kenanga said.

       Kenanga observed that larger wafer fab players such as TSMC and SMIC have started their capex plan early in the year, while medium sized players are only starting to execute their capex plans now and can no longer hold back as the gap between surging demand and available capacity continues to widen.

       “This indicates that we can expect more wafer fab expansion to come and Kelington is in a favourable position to benefit from more UHP jobs, in line with management’s goal to achieve another year of record job wins.

       “The group’s tender-book has jumped to RM1.5bil, a sharp increase of 50% from the RM1bil usually reported by them,” Kenanga said, adding that it maintained an “outperform” with a higher target price of RM1.50.

       It has maintained FY21E-22E earnings of RM31.1mil and RM35.6mil, representing growth of 78% and 14%, respectively.