Hextar Capital plans to diversify into the construction sector

• The proposed diversification is expected to boost the group’s net profit by about 25%, in line with its long-term strategy to pursue more engineering, procurement, construction and commissioning (EPCC) projects in addition to telecommunications network projects, the group said in an exchange filing.

KUALA LUMPUR (April 19): Fiber optic cable manufacturer Hextar Capital Bhd, formerly known as Opcom Holdings Bhd, said it plans to diversify into the construction and project management sectors.

The proposed diversification is expected to boost the group’s net profit by about 25%, in line with its long-term strategy to pursue more engineering, procurement, construction and commissioning (EPCC) projects in addition to telecommunications network projects, the group said in an exchange filing.

In addition to the production of fiber optic cables and cable-related products, Hextar Capital is involved in telecommunications network infrastructure solutions and energy generation and transmission.

On April 12, the group was awarded a RM97 million subcontract for the construction of student hostels for Universiti Malaysia Kelantan from Landasan Kapital (M) Sdn Bhd.

This marks a strategic move for the group to expand its EPCC services and venture into the construction and civil engineering domains, the group said.

Hextar Capital said it plans to pursue additional construction projects in light of the promising outlook for the construction industry.

It noted that growth in the civil engineering sub-sector will be driven by strategic infrastructure and utility projects such as the Central Spine Road (CSR), the Pan Borneo Sabah Highway and the initiatives set out in the 12th Malaysia Plan 2021-2025. Moreover, opportunities are expected from new projects such as the solar power plant under the Corporate Green Power Program, the report said.

“The implementation of the New Industrial Master Plan (NIMP) 2030 is expected to further strengthen the performance of the non-residential construction sector as the plan will provide a platform to attract more investments into the country.

“Additionally, the housing subsector is expected to further improve in line with the government’s efforts to increase affordable housing as outlined in the mid-term review of the 12th Malaysia Plan and the Madani Neighborhood Programme, as well as new launches by the private sector” , the group added.

Hextar Capital’s largest shareholder is Hextar Group CEO Datuk Eddie Ong Choo Meng, who has a direct stake of 27.27%, according to the group’s latest annual report. Ong first emerged as a substantial shareholder in February 2021, acquiring a 15.28% stake when the group was still known as Opcom.

For the first quarter ended December 2023, Hextar Capital posted a net profit of RM965,000 – after reporting two consecutive quarters of net loss – on the back of revenue of RM34.29 million, mainly attributed to successful contract execution and timely delivery of products and services in the engineering and manufacturing sectors.

Shares of Hextar Capital are down more than 38% year to date. They closed five sen or 1.32% lower at 37.5 sen on Friday, valuing the group at RM165.46 million.

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