KUALA LUMPUR: Kejuruteraan Asastera Bhd (KAB) made a firm debut on Bursa Malaysia’s Ace Market yesterday as it opened 32 per cent higher to 33 sen from its offer price of 25 sen.
KAB subsequently gained 20 per cent to end its first day at 30 sen and was the most active counter with 159.92 million shares traded.
KAB issued up to 80 million new shares to raise RM20 million. There is also an offer for sale of 32m shares by way of private placement to institutional and selected investors.
Of the RM20 million proceeds, Kejuruteraan Asastera plans use RM12.10 million for working capital, RM2.60 million for purchase of materials and components and RM2 million for human resources.
Another RM2.20 million would be earmarked for capital expenditures, RM1.60 million for repayment of borrowings and RM3.50 million for listing expenses.
At the listing ceremony, KAB managing director Datuk Lai Keng Onn said its listing exercise was well-timed.
“KAB is expected to perform positively in spite of the current property market slowdown as one of our strategic growth plan is to focus on previously untapped areas, such as the retrofitting and refurbishment of aged buildings.
“Further, with more affordable housing projects undertaken, and the overall positive outlook for the construction sector from sustained public sector investments and growth-oriented policies, as announced in the 2018 Budget, the company is well positioned to grow its market share and to strengthen its mechanical engineering services capabilities,” he said in a statement.
Maybank Investment Bank said Kejuruteraan Asastera’s growth is imminent as its listing will support its expansion plan.
“Pursuant to this IPO, it will have a stronger balance sheet to support its expansion plan, which includes tendering for bigger jobs and growing its mechanical engineering services,” the research house said.
The government’s initiatives to promote affordable housing programmes nationwide and the rising need for building upgrading, expansion, refurbishment, retrofitting and renovation will drive demand for electrical and mechanical services, it added.
Maybank IB said Kejuruteraan Asastera has an outstanding order book of RM216.9 million at end-May 2017, which will be progressively recognised over FY17-FY19.
Kejuruteraan Asastera has almost 20 years of experience in the electrical and mechanical engineering services industry.
It is registered with the Energy Commission Malaysia as a Class A electrical contractor, which allows the group to tender for electrical projects exceeding RM1 million.
It is also registered with the CIDB as a Grade “G7” licence holder, allowing the group to tender for electrical projects with unlimited value.