Sedania to post strong earnings growth in FY22-23, says Kenanga

KUALA LUMPUR (June 20): Kenanga Research said it expects Sedania Innovator Bhd to post strong earnings growth in FY22-23 upon the fruition of its expansion plans.

In a note on Monday (June 20), the research house which does not have a rating on the stock, highlighted Sedania as a potential ESG play, which may appeal to the more ESG-conscious investors seeking exposure within this space.

“Through its Sustainable Energy segment, Sedania primarily offers energy sustainability services which aim to help organisations reduce carbon emissions, while under its Sustainable Healthcare segment, the group offers eco-friendly baby products under the brand name “Offspring”.

ESG analysis

Kenanga said it has scored Sedania 73% based on its proprietary ESG scoring method.

“What we like most about Sedania is its value creation through providing ESG solutions through its Sustainable Energy segment while its Sustainable Healthcare segment check most of the “Social” boxes in terms of product quality and safety.

“Environmental data tracking could be better from an ESG disclosure level, but we are also cognisant of the fact that disclosures alone are more often than not, lip service while Sedania’s role as an ESG solution provider should be rewarded in terms of valuations,” it said.

“The group is expected to post decent strong earnings growth in FY22-23 upon the fruition of its expansion plans,” it said.

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