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Do not buy until the falling knife has stopped with reversing trend for this stock has been targeted by “syndicate” who holds ipo tickets to press down the price and buy back at lower price to make a profit
· EITA: A stable, dividend-paying company in the elevator industry. It's a market leader with a strong recurring revenue stream from maintenance, making it a defensive pick.
· Powertechnics: A niche player in the power quality and engineering sector. It's more of a cyclical and project-based company, with growth tied to industrial and data centre investments.
· Falco: A manufacturer of cables and wires. It's a player in a highly competitive, commodity-like market, with its fortunes tied to construction, infrastructure, and raw material (mainly copper) prices.
EITA Resources (5208)
· Strengths:
· Recurring Revenue: The "bread and butter" is its large portfolio of maintenance contracts, providing financial stability.
· Strong Brand & Reputation: Decades of experience and a trusted name in the industry.
· Defensive Nature: Elevators need maintenance regardless of the economic climate.
· Risks:
· Dependence on Property Sector: New installation sales are correlated with the health of the residential and commercial property market.
· Competition: Faces competition from international giants (e.g., Kone, Schindler) and other local players.
Powertechnics Berhad (0032)
· Strengths:
· Niche Expertise: Specialized in power quality, a critical need for modern, sensitive equipment in data centres and factories.
· High-Growth Potential: Perfectly positioned to benefit from the massive, ongoing data centre boom in Malaysia and the region.
· Technical Barrier to Entry: Their solutions require engineering expertise, which protects them from low-end competition.
· Risks:
· Customer Concentration: Reliance on a few large projects or clients can lead to significant revenue volatility.
· Project-Based Risks: Risks of project delays, cost overruns, and intense bidding competition.
· Cyclicality: Performance is tied to capital expenditure cycles in the industrial and tech sectors.
Falco Holdings (0006)
· Strengths:
· Essential Product: Cables and wires are fundamental to all construction and infrastructure projects.
· Broad Market: Serves a wide range of industries from construction to manufacturing to telecommunications.
· Risks:
· Intense Competition: The market is crowded with both local and foreign manufacturers, leading to price wars.
· Commodity Price Risk: Profitability is highly sensitive to the price of copper, its primary raw material. Hedging is crucial.
· Low Margin Business: Struggles to differentiate its products, often competing mainly on price.
Conclusion: Which One is for You?
Your choice among these three companies depends entirely on your investment profile and strategy.
· Choose EITA if: You are a risk-averse or income-focused investor. You seek stability, consistent dividends, and a business with a strong defensive moat (maintenance contracts) that can weather economic cycles. You are bullish on long-term Malaysian infrastructure but want to avoid the volatility of pure construction plays.
· Choose Powertechnics if: You are a growth-oriented investor willing to take on higher risk for potentially higher returns. You believe in the long-term story of data centres, industrial automation, and Malaysia's position in the tech supply chain. You are comfortable with stock price volatility associated with project-based earnings.
· Choose Falco if: You are a cyclical investor who wants to bet on a broad recovery in the Malaysian construction and infrastructure sector. You understand the commodities cycle and are comfortable with a business that operates on thin margins but can see significant earnings expansion during an economic upswing.
