KUALA LUMPUR (Aug 2): British-domiciled multinational insurance company Prudential plc has emerged as a substantial shareholder in cable support system provider United U-Li Corp Bhd (KL:ULICORP).

According to a bourse filing on Friday, Prudential acquired 37,700 shares United U-Li on July 31 through funds managed by Eastspring Investments Bhd, raising its shareholding in the company to 5.19%.

United U-Li is controlled by its co-founders Tan Sri Lee Yoon Wah and his brother Tan Sri Lee Yoon Kong through Pearl Deal (M) Sdn Bhd, with a 37.19% stake.

Yoon Wah is United U-Li’s managing director and chief executive officer, while Yoon Kong is an executive director.

Only Kenanga Research has coverage on United U-Li, with an "outperform" call and a 12-month target price of RM2.38.

The stock closed 13 sen or 5.94% lower to RM2.06 on Friday, for a market capitalisation of RM448.67 million. Year to date, it is up 31.21%.

In a note on May 28, Kenanga said United U-Li's earnings prospects are robust, driven by strong demand for its cable support systems on the back of a construction boom, both in the private space as well as impending public mega projects.

"The consolidation in the local cable support system market during the pandemic era (ie weak players shutting down permanently) has also led to reduced competition which augurs well for market leader United U-Li," the research house said.

For its first quarter ended March 31, 2024 (1QFY2024), United U-Li's net profit more than doubled to RM8.57 million compared to RM4.19 million a year ago. This was mainly driven by higher revenue and higher profit margins from sales of goods, coupled with lower expenses from all its business divisions during the quarter under review.

Revenue for the quarter rose 6.64% to RM60.7 million from RM56.93 million previously.

It declared a dividend of two sen per share for the quarter under review.