One Gasmaster earnings seen easing in FY25, recovery expected from FY26

KUCHING (Jan 15): ACE Market-bound One Gasmaster Holdings Bhd (OGM) is projected to see a decline in core earnings in FY25 due to slower performance following the impact of Section 301 tariffs in early 2025, according to analysts with TA Securities.

Section 301 tariffs are US import duties imposed on selected Chinese-origin goods under the US Trade Act of 1974. The exclusions cover 178 products, including certain industrial equipment, electric vehicles, batteries, critical minerals, semiconductors and solar cells.

Despite near-term impact, the research house expects earnings to resume with an upward trajectory in FY26 and FY27, supported by the group’s business expansion plans and a favourable industry outlook.

It estimates OGM’s earnings to record growth rates of -0.7 per cent in FY25, followed by 28.7 per cent in FY26 and 15.6 per cent in FY27, translating into core earnings of RM4.8 million, RM6.2 million and RM7.2 million respectively.

These projections are based on assumptions of revenue growth of -10.0 per cent in FY25, 28.0 per cent in FY26 and 15.0 per cent in FY27, alongside core profit margins of 14.1 per cent, 14.2 per cent and 14.3 per cent over the same period.

To recap, in FY23, the group’s core profit rose 46.4 per cent year-on-year (y-o-y) to RM3.5 million from RM2.4 million on the back of higher sales of gas detection and industrial hygiene products as well as increased maintenance and calibration services for environmental monitoring solutions.

Similarly, core profit climbed 37.3 per cent y-o-y to RM4.9 million in FY24, underpinned by higher project revenue from environmental monitoring solutions.

OGM is principally involved in environmental monitoring, gas detection and gas piping, as well as industrial hygiene services.

The group also provides maintenance and calibration services through its calibration laboratory and is engaged in the trading of instruments, parts and components.

Under its initial public offering (IPO), the company is issuing 77.5 million new shares and offering 15.5 million existing shares at an IPO price of RM0.25 per share, raising RM19.4 million.

Of the proceeds, RM3.8 million will be used for expansion into emission control solutions, including the acquisition of new instruments and the hiring of two senior project engineers.

Another RM4.9 million is allocated for setting up new branch offices in Johor, Terengganu and Penang, while RM5.0 million will be used for working capital.

The remaining funds will go towards establishing a new calibration laboratory at its Damansara office (RM1.7 million) and covering listing-related expenses (RM4.0 million).

TA Securities has assigned a target price-to-earnings (PE) multiple of 13 times to OGM’s FY26 forecast earnings, arriving at a fair value of RM0.25 per share, citing positive industry outlook and the group’s expansion plans involving emission control solutions, additional calibration facilities and new branch offices.

The group’s listing is scheduled for Jan 27.