(From left) M&A Securities Sdn Bhd corporate finance deputy head Danny Wong, Swift Energy Technology Bhd director Yee Kim Mei, director Zurul Ain Zulkarnain, executive director and chief operating officer Chin Saw Yong, executive director and chief executive officer Tan Bin Chee, chairman Mohammad Nizar Idris, director Leong Choong Wah, corporate affairs director Suzana Abu Bakar, M&A Securities managing director Datuk Bill Tan and corporate finance head Gary Ting at the listing ceremony of Swift Energy on the ACE Market of Bursa Malaysia.
KUALA LUMPUR: Swift Energy Technology Bhd, which made its debut on the ACE Market of Bursa Malaysia yesterday, aims to focus on growing its presence within Asean.
Chief executive officer Tan Bin Chee said the industrial automation and power systems firm will build its base and business further to a more recognisable volume and achievement.
“We are still a very small company and our job here now is to further our business and profit. Over the past four years, we have enjoyed a cumulative RM39mil in profit after tax,” he said after the company’s listing ceremony.
Swift Energy’s debut marked the country’s first initial public offering (IPO) for 2025. The counter opened at 36 sen, a premium of eight sen above its IPO price of 28 sen per share.
On the potential impact of capital expenditure (capex) cuts by national oil company Petroliam Nasional Bhd (PETRONAS), Tan said he does not foresee a significant effect on the company. He clarified that Swift Energy is primarily involved in providing a greener source of energy instead of crude oil or petroleum production.
“Our explosion-proof (Ex) rated solar photovoltaic (PV) systems concentrate on providing the appropriate power supply requirement for the production activity of the wellhead platform that is designed for natural gas. So, we don’t see the major impact on us,” he said.
Notably, Swift Energy is the only Ex solar PV systems company in Asean, and one of only six globally.
Instead, he highlighted the group’s recent contract win for the Ex solar PV system alongside other project wins, locally and internationally, will contribute significantly to the group.
Tan also emphasised the group’s plan to continuously capture new projects, in collaboration with its public-listed partner in Indonesia.
“It is quite a reputable company with over 30 years of operating experience. We hope that with its strength, it will help us to capture more opportunities.”
Having raised RM70.06mil from its IPO exercise, the group has allocated over 50% of the proceeds for expansion plans – of which close to 40% has been put aside for the expansion of its fabrication facility, storage, office and new research and development (R&D) centre.
The group will also be allocating 3.14% towards purchasing new machinery, equipment and software; 2.11% towards setting up a dedicated R&D centre for the development and enhancement of new and current products and services; as well as 5.75% to expand its business in Indonesia.
The remaining funds have been put aside for repayment of borrowings, working capital and estimated listing expenses.
Meanwhile, Kenanga Research has an “outperform” recommendation on Swift Energy with a target price of 60 sen, while Hong Leong Investment Bank (HLIB) Research, despite not rating the stock, had set the group at a fair value of 42 sen.
Kenanga Research highlighted Swift Energy’s unique position as the sole Ex solar PV player in Asean, with a proven track record and diverse product offerings.
This adds to the brokerage’s optimistic outlook for the company as anticipated growth is expected to come from Wilmar Group’s recovering investment in retrofitting plant and machinery. Contributions from Wilmar alone were noted to be about 15% to 24% of revenue to Swift Energy since financial year 2021 (FY21).
With Wilmar’s capex projected to rebound from a decade-low of RM100mil to RM300mil, Swift Energy is poised to benefit significantly.
Despite many concerns on PETRONAS’ capex cut, project rollouts are now said to be expedited, leading Swift Energy’s order book to surge by 26% quarter-on-quarter to RM70mil in the fourth quarter of FY24 –mainly driven by its Ex solar PV system.
Meanwhile, HLIB Research highlighted that Swift Energy is bound to ride on the growing oil and gas (O&G) investment in South-East Asia.
Citing Rystad Energy, the brokerage noted that O&G development investments in South-East Asia are projected to soar to US$30bil during 2024 to 2025, a significant jump from US$9.5bil during 2022 to 2023.
“Additionally, South-East Asia’s offshore gas production is set to unlock a US$100bil potential, supported by planned final investment decisions expected to materialise by 2028, more than doubling the US$45bil recorded between 2014 and 2023.
“The growing investment presents a compelling opportunity for Swift Energy to capitalise on the trend, given its strong expertise in supplying Ex-rated power distribution systems, a mandatory requirement in the O&G sector,” it said.
It closed 11.5 sen up to 39.5 sen, making it the most active stock of the day.
