Annual revenue of RM375mil for Nextgreen new venture

PETALING JAYA: Nextgreen Global Bhd’s latest venture is expected to generate an annual revenue of RM375mil and profit after tax of RM87mil by 2031.

This will be upon completion and ramp-up to full production capacity after two years of operation.

Phillip Capital Research said it was positive on the venture as key earnings upside would come from Neuwhite Paper Pulp Sdn Bhd’s long-term pulp operations with Xiamen C&D as the 100% pulp offtaker.

Nextgreen and IOI Corp Bhd, via their joint entity Neuwhite Paper Pulp Sdn Bhd, acquired 32.794ha of industrial land in Green Technology Park (GTP), Pekan, Pahang for RM70mil for the empty fruit bunch or EFB-based pulp manufacturing facility.

The house maintains its “buy” call with a target price of 99 sen a share.

This is based on a price to earnings multiple of 11.8 times applied to its financial year 2025 projected earnings per share of 8.3 sen. It is positive on Nextgreen given its position as Malaysia’s pioneer in palm-based waste-to-value solutions.

Its advantage is the use of a patented technology that converts EFB into high-grade pulp without relying on traditional wood fibres. Its superior gross profit margins are driven by operational efficiency and higher-value fertiliser products.

The key risks include delays in GTP execution, financial risks and geopolitical tensions affecting export

Proceeds from the land sale would be used to reduce RM56mil in debt and working capital, while construction of the plant is slated to begin after approvals, targeted by the third quarter of financial year 2026.

Neuwhite is 75%-owned by Nextgreen IOI Pulp Sdn Bhd – a 55:45 joint venture between Nextgreen and IOI, while the remaining 25% stake is held by Hong Kong Paper Sources Co Ltd, a wholly-owned subsidiary of China’s Xiamen C&D.

The land, located within the GTP in Kampung Paloh Hinai, is being acquired from Ultimate Ivory Sdn Bhd, a wholly-owned subsidiary of Nextgreen.

Ultimate Ivory has substantially completed the key site preparation works including earthworks, road access and utilities installation worth RM56.2mil.