Uzma eyes income streams from satellite venture

PETALING JAYA: Uzma Bhd, which successfully launched its SAT-1 satellite on Jan 14, is currently pursuing some RM300mil to RM350mil contracts in this area.

According to Phillip Capital Research, the bulk of it is expected to come from the build-operate-transfer (BOT) model.

“Uzma has identified three income streams from this venture, including pure-construction (typically over one-to-two years), BOT which allows it to build its recurring income base, and imaging.

“Uzma targets this new space venture to contribute more than 10% of financial year 2026 (FY26) earnings, which we had not imputed into our earnings assumption,” it said.

The company is also bidding for three additional contracts, as it wants to expand its market share in the artificial gas lift segment.

Meanwhile, Phillip Capital said its electric submersible pump (ESP) business is gaining traction after it had secured some RM2mil contracts for two units of ESPs as part of a trial project in Saudi Arabia.

Its management is also planning to reuse capital from the WIF Marsya project to fund future solar projects, which is expected to fully repay its debt by the first half of 2026.

This coincides with the anticipated large scale solar (LSS5+) award timeline expected by early 2026, it noted.

Uzma is also supported by a healthy order book of RM3.1bil, it said.

On its financials, Phillip Capital said Uzma’s earnings momentum is expected to accelerate in FY26, despite the earnings decline that was seen in FY25.

It will be driven by LSS4 contributions, the second water injection facility project and drawing on its strong order book levels.

“Uzma is trading at an attractive four times forward FY26 price to earnings ratio.

“We reiterate our ‘buy’ rating and RM1.10 per share target price, based on an eight times price-to-earnings ratio on FY26 forecast earnings per share. A dividend yield of 3.4% should help provide support to the share price,” it said.

But it also cautioned of its key risks which includes lower-than-expected work orders from customers, unforeseen project delays and any escalation in project execution costs.