SCABLE – Scoring to A New High

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The local market should be able to see back some bullishness and more participation from the retailer as the Western leaders had committed to keep the rates low and as Europe will push the economy rolling as they start their own quantitative easing to continue push on the recovery of the economy. While the World Cup had been giving quite a number of unexpected match result, the KLSE had been quite unexpected as well, choosing to remain in a slumber manner despite the bullish news from the foreign market.

However, I would presume that the KLSE market will start to resume into action soon in the middle of June and early of July, prior to a pre-Hari Raya pump up. While most of the counter had been sitting on the high side, SARAWAK CABLE BERHAD had managed to caught up with my attention.

Let’s have a quick glance on the recent price movement of SCABLE

SCABLE had been consolidating at the region of RM 1.50 to RM 1.60 for around 5mths. SCABLE might be seeing saturation at the current level, and a strong fresh volume will be anticipated to take place in SCABLE as SCABLE will start to take it’s stronghold above RM 1.60 in the coming days ahead after the company had been awarded with numerous of mega projects that will be looking to worth billions of ringgit.

SCABLE is primarily involved in the power solutions. It manufactures two types of power cables, wires and conductors. The single core power cables and wires and multi-core power cables and wires are used in distribution lines, as well as inside end user homes, offices and factories. It manufactures conductors that support voltage in excess of 33 kilovolts and include all aluminium conductors (AAC), all aluminium alloy conductors (AAAC), all aluminium conductor steel reinforced (ACSR) and aluminium binding wires.

SCABLE on the prime moment

SCABLE had been in a prime limelight of late when their subsidiary Trenergy Infrastructure Sdn Bhd had secured a total project worth of RM618.6 million with joint venture partner, Sinohydro, for the Package B (MAPAI to LACHAU – RM352.8m) and Package C (LACHAU – Tondong – RM 265.8m) cabling project.

Previously, SCABLE had secured a small scale project at the Tudan-Miri 132kV stretch, carrying a project value of RM 32.9 million. SCABLE will also start to see some recurring contribution from the RM80 million 10MW mini hydro plant that is constructed at North Sumatra.

SCABLE, where 33% is owned by Datuk Seri Mahmud Abu Bekir Taib, the eldest son of Tan Sri Abdul Taib Mahmud, is a strong and dominant company in the region of Sarawak. Sarawak biggest catalyst will be the SCORE development that will be looking to attract more than RM200 billion in investment from numerous local and foreign company, particularly those who are involved in energy sectors. Under the SCORE outline, Sarawak will become on of the mega power house that will see more hydro electric plant to be erected. Currently on the plan is Baram – 1200MW, Baleh – 1295MW, Pelapus – 410MW,  Limbang 1 & 2 – 200MW and Lawas – 100MW. While all these huge mega project will be generating more electric power, the important medium to transfer the electricity is though the cables.

With such bright future ahead, SCABLE will be looking to see more projects being secured in the 2H of 2014.

Current Catalyst

SCABLE will be expecting an official announcement on their coming up project that is covering from Tanjung Manis to Bintulu and Manbong to Kalimantan, both carrying a combined total of RM 400 million. The project will be slated to be announced soon in around the 2nd of 2014.

We expect more project in relation with SCORE to be dished out soon in the 2H of 2014 after seeing more SCORE/SARAWAK related companies making a run up that had been going on for quite sometime. SCABLE at it’s current price of RM 1.53 is really liken to a canon ready to be explode in the coming days.

SCABLE purchase quite a number of  medium to high voltage cable from Universal Cable. SCABLE move to privatize it’s supplier will be looking to see a greater benefit in the long run as there will be more and more cabling project to be dished out in Sarawak under the Rural Electrification Scheme.

I believe SCABLE will be a good company to be invested into based on
– Strong political ties with the government of Sarawak.
– Robust and bullish growth outlook for SCORE in Sarawak
– Securing RM400m Tanjung Manis – Bintulu and Manbong – Kalimantan project
– Potential winner for SCORE Phase 2 which consist of a 500kV line and 2x 275kV line
– Strong Order book which had more than RM 1billion worth of contract in hand
– Potential Winner for future projects that might be worth more than RM 3 billions from the hydro electric plant at Baram 1200MW, Baleh 1295MW, Pelagus 410MW, Limbang 1&2 200MW and Lawas 100M.

SCABLE will be looking to break forward in the coming days. A short term outlook will place SCABLE above RM 1.60, while a longer term outlook will see SCABLE soar above RM 2.00 in the coming days.

Bone’s short term TP: RM 1.70

Cheers and have a nice day

Regards,
Bone

Bonescythe Stock Watch

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