Contract wins totalling $10.6 million (£8 million) send shares in Malaysia-headquartered air purification outfit Mayair (MAYA:AIM) up 15.4% to 44p.
New projects include a $5.3 million deal to supply fan filtration units to China-headquartered Shenzhen O-Film Technology and extra work on an ongoing project to install clean air systems at the offices of China telecoms giant Huawei.
Work on most of the contracts is expected to begin in 2016.
‘MayAir has the technologies and solutions, as well as brand recognition, to grow sales and our ability to win new business has increased each year as the global demand for both clean room facilities across a range of industries, and the large commercial clean air market, where we have secured contracts for both retrofit and new build projects, continues to see strong growth,’ said Yap Wee Keong, chief executive of Mayair.
‘We are particularly pleased to secure additional contracts for customers in our commercial division where we have previously installed our clean air solutions at their other sites. 2016 to date has produced robust revenue growth and as a result, we look forward with much confidence.’
Among the biggest gainers on the stock market today, small cap Mayair still trades way below the 130p initial public offering price at which it joined the stock market back in May 2015.
Investment managers Invesco and Standard Life are on the shareholder register, along with significant shareholdings among senior management.
GROWING CLEANROOM MARKET
‘We see MayAir as an established player in the growing cleanroom market and a strong first mover in the new and potentially large commercial clean air market in East Asia,’ wrote analyst Adam Forsyth at house broker Cantor Fitzgerald.
Forsyth adds ‘traction is beginning to build and we see strong double digit earnings growth over the next few years once the dilutive impact of last year’s fund raising works itself out’.
Adjusted profit before tax was $6.5 million in the year to 31 December 2014 and $7.5 million in 2015.
In 2016, Cantor’s forecasts sales to grow 17% to $74.7 million, profit-before-tax to hit $8.9 million and earnings per share of 14.8p.
The forecasts were published on 13 July, before the latest round of contract successes.
At 44p, shares in Mayair value the business at £18 million.
Key risks to Mayair’s business include a failure to gain traction in the commercial clean air market, increased competition from rivals, a slowdown in China’s economy and delays or cost overruns on the construction of a new factory.