Hextar Capital plans to diversify into construction business

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

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

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

Besides manufacturing fibre optic cables and cable related products, Hextar Capital is involved in the telecommunication network infrastructure solutions business as well as power generation and transmission business.

On April 12, the group secured a RM97 million sub-contract 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 broaden its EPCC services, venturing into construction and civil engineering domains, the group noted.

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

It noted that the growth in the civil engineering subsector will be driven by strategic infrastructure and utility projects such as the Central Spine Road (CSR), the Pan Borneo Sabah Highway, and the initiatives outlined in the 12th Malaysia Plan 2021–2025. Additionally, opportunities are anticipated from new projects like the solar power plant under the Corporate Green Power Programme, it said.

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

“In addition, the residential buildings subsector is projected to improve further in line with the government’s effort to increase more affordable houses as outlined under the Mid-Term Review of the 12th Malaysia Plan and the Madani Neighbourhood scheme, as well as new launchings by the private sector,” the group added.

Hextar Capital's largest shareholder is Hextar Group chief executive officer Datuk Eddie Ong Choo Meng, who holds a direct stake of 27.27%, according to the group’s latest annual report. Ong first emerged as the 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, primarily attributed to successful contract execution and timely delivery of products and services in the engineering and manufacturing sectors.

Shares of Hextar Capital have fallen over 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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