West River Berhad (WESTRVR)

West River Berhad (WESTRVR) - A Promising M&E Contractor With a Painful Post-IPO Story

West River Berhad is a Mechanical & Electrical (M&E) engineering contractor headquartered in the Klang Valley, Malaysia. The company listed on Bursa Malaysia's ACE Market on 5 May 2025 at an IPO price of RM0.39. Today, shares trade around RM0.21 - a 46% decline from the IPO price. That is the uncomfortable reality investors must confront before going any further.

What Does The Company Do?

WESTRVR operates across three business segments:

• Electrical Engineering & ACMV Services (~96% of revenue) - The core engine of the business. This covers high/medium/low voltage electrical works (HV/MV/LV/ELV), air-conditioning installation (chiller plants, VRV/VRF systems), air-conditioning and mechanical ventilation (ACMV), smoke extraction systems, and Solar PV. The company is also ESCO-certified.
• Intelligent Building Solutions (~3.7% of revenue) - A proprietary IoT platform called Neutron for smart building automation systems (BMS).
• Manufacturing (~0.3% of revenue) - Production of electrical panels and distribution boards.

Who Are Their Clients?

Geographically, approximately 80% of projects are in the Klang Valley, with active expansion into Johor (data centres) and Penang.

Key Milestones

• G7 CIDB Certification - The highest contractor grade in Malaysia's construction industry, allowing WESTRVR to tender for projects of unlimited contract value. A critical qualification for large-scale projects.
• ISO 9001:2015 - International quality management system certification.
• April 2026 - First Data Centre Contract! - WESTRVR secured a RM25.2 million contract for a Consumer Landing Station (undersea cable landing station) in southern Malaysia. This marks a strategic entry into the booming data centre segment.
• March 2026 - Hydropower Diversification - Through subsidiary Neutron Power Sdn Bhd, the company acquired 95% of Ace Hydropower Sdn Bhd (Kinta Hydropower, Perak) for RM850,000. An early move into renewable energy infrastructure.

A Tale of Two Phases: Strong Track Record vs Post-IPO Disappointment

This is the central tension in WESTRVR's story. Pre-IPO performance was genuinely impressive: five-year revenue growth (FY2020-FY2024) achieved a CAGR of +27.8% per year, with net profit margins consistently between 7-9%.

But FY2025 delivered a shock: Revenue fell -9.4%, Net Profit collapsed -44.8%. This triggered a share price crash from the August 2025 peak of RM0.655 to current levels around RM0.21.

There is a glimmer of recovery - Q1 FY2026 showed revenue +59% year-on-year, and the company just secured its first data centre contract. The question is whether this represents a genuine turning point.

Financial performance: three straight quarters of improvement

West River posted Q2 FY2026 revenue of RM39.43 million, up 53.0% from RM25.78 million a year earlier, and profit after tax of RM2.40 million (net margin 6.10%). For the first half, revenue was RM79.07 million (+56.0%), profit before tax RM6.10 million (+54.2%) and profit after tax RM4.63 million (+81.6%).

Notably, Q2 revenue dipped 0.5% from Q1 (RM39.64 million). The profit gain came from gross margin rising from about 8.2% to about 12.5% as management executed more higher-margin contracts. So this quarter is about quality of revenue, not quantity.

The core business (electrical works and air-conditioning and ventilation, ACMV) contributes about 87% of revenue, at RM69.08 million in H1 (+46.5%). Intelligent building solutions (IBS) is about 12%, or RM9.88 million, up from RM3.38 million.

Last seven quarters (RM million, except EPS and NAPS)

No dividend was declared in any of the quarters above.

Dividends: none paid

West River has not paid any dividend since listing on 5 May 2025. DPS is zero for every recorded quarter, so the dividend yield at RM0.42 is 0%. Investors seeking regular income will not find it here for now.

This is not unusual for a newly listed ACE company that is expanding capacity (IPO proceeds were earmarked to expand production capacity, according to IPO coverage). Investor return currently comes entirely from share price movement, which makes the stock riskier than dividend payers.