KUALA LUMPUR (June 19): Shares of Nestcon Bhd (KL:NESTCON) rose to its highest in 15 months after the construction engineering firm announced that it has bagged two contracts worth a total of RM165.56 million.

Nestcon rose as much as 8.3% or 3.5 sen to 45.5 sen, its highest since February 2023. The stock was trading at 44.5 sen at 9.50am, still up by 2.5 sen or 5.95%, valuing the company at RM315.15 million on Bursa Malaysia. Trading volume totalled 1.22 million shares so far.

The counter has gained 17.1% year to date, and 23.6% over the past year. There is currently no analyst coverage on the construction firm. Nestcon mainly develops infrastructure, and provides civil works and building construction services to customers in Malaysia.

On Tuesday, Nestcon announced that it had been awarded a RM103.5 million contract by Sunrise Charm Sdn Bhd to construct a 45-storey mixed commercial development comprising strata offices and serviced apartments on Jalan Mayang in Kuala Lumpur. The job is to be completed within 44 months from the date of commencement, which has yet to be notified.

Separately, Nestcon said it also received a contract worth RM62.06 million from Taipanika Development Sdn Bhd to construct 12-storey apartments in Subang Murni, Shah Alam. This project is to be completed within 20 months from July 8.

For the first quarter ended March 31, 2024, Nestcon’s net profit tripled to RM1.58 million from RM518,000 a year earlier. Revenue climbed 42.1% to RM208.49 million from RM146.68 million due to a higher level of construction activities.

As of March 31, Nestcon had recorded an unbilled order book of RM1.83 billion.

In April, the construction firm said it was venturing into renewable energy (RE), as it aims to bolster future earnings and expand the group's income stream. Its plans to diversify operations include engineering, procurement, construction and commissioning (EPCC) of solar photovoltaic (PV) systems, project management of RE activities, and ownership and operation of solar PV assets.

The group foresees the RE business potentially contributing 25% or more to the group's net profits and/or diverting 25% or more of the group's net assets in the future. This expectation is driven by ongoing efforts to identify and secure additional projects, fostering further expansion of the RE business in the long term.

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Nestcon bags two construction projects in Klang Valley worth RM166 mil