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Tex Cycle Technology (M) Berhad-Bursa: 0089 (“Tex Cycle” or the “Company”) has been making significant strides in the waste management and environmental sustainability sector. The recent Technical Buy report by Public Bank on 12 Dec 2024 highlights the Company's robust momentum, with a current price of RM1.15 and target prices of RM1.21 and RM1.28, reflecting potential returns of 5.2% and 11.3% respectively. The report anticipates continuous improvements in momentum and trend, positioning Tex Cycle for further upside.
The company’s Q3 FY2024 financial results showcased 120.2% profit before tax (“PBT”) growth, reaching RM3.4 million, and a revenue increase of 27.7% year-on-year to RM10.6 million. This growth is largely attributed to the recovery and recycling division, driven by Tex Cycle’s strategic initiatives and market positioning.
Tex Cycle has also been expanding its operational scope through strategic acquisitions and partnerships. Key developments include:
1. Acquisition of Meridian World: This RM55 million acquisition enhances Tex Cycle’s capabilities in chemical processing and wastewater management, supported by a profit guarantee of RM12 million for FY2024 and FY2025.
2. Safety & Environmental Laboratory (SEL): The acquisition of SEL adds environmental and safety compliance services to Tex Cycle’s portfolio, backed by a profit guarantee of RM2 million annually.
3. Partnership with BiobiN Technologies: This collaboration introduces BiobiN® systems for sustainable organic waste management, strengthening Tex Cycle’s innovative waste solutions.
Furthermore, Tex Cycle recently launched Malaysia’s first centralised biogas plant in Johor, converting palm oil mill effluent into clean energy. This initiative aligns with Malaysia’s energy transition goals, showcasing the company’s commitment to renewable energy and environmental sustainability.
Tex Cycle’s proposed transfer to the Main Market of Bursa Malaysia earlier this year reflects its robust financial health and growth potential. This strategic milestone is expected to attract institutional investors and bolster market confidence.
With its innovative solutions, strategic expansions, and strong financial performance, Tex Cycle is poised for sustainable growth. Retail investors looking for exposure to the waste management and renewable energy sectors may find Tex Cycle an attractive investment opportunity.
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