KUALA LUMPUR: AME Elite Consortium Bhd, which debut in the main market of Bursa Malaysia today, is optimistic of its growth prospects as it positions itself to meet demand for industrial properties resulting from the ongoing US-China trade war tensions.
Group managing director Kelvin Lee Chai said the company would leverage on its enhanced profile as a listed entity and the initial public offering (IPO) proceeds raised, to execute future plans for its integrated i-Park industrial parks in Johor as well as to replicate the i-Park brand in other Peninsular Malaysia states.
"The holistic approach taken for our industrial parks by providing full-fledged services including workers’ accommodation and recreational facilities has been major defining factors in attracting multinational corporations to our i-Parks, particularly in light of increasing inquiries resulting from the US-China trade tensions.
"To this end, we have set in motion plans to expand the i-Park@Senai Airport City development from 112 acres currently to 189 acres with the recent acquisition of a parcel of land for Phase 3," Kelvin said at the group’s listing ceremony here today.
The integrated industrial property solutions provider is also hopeful of expanding dormitories’ facilities to cater further to the requirements of multinational and local corporations.
"In doing so, this will increase our recurring income stream in the future which further enhances our prospects," he said.
The main benefits derived from the development of these dormitories include helping companies based in the industrial parks to eliminate the hassle of finding accommodations for their workers and adhere to the government’s proposal to ensure foreign workers are provided with proper accommodation.
To promote further growth in this segment, the group intends to duplicate the workers’ dormitories business model for future industrial park developments and proactively monitor and improve the quality of the dormitories as well as its adjoining facilities.
AME posted a 96.0 per cent jump in net profit to RM13.1 million in the first quarter ended 30 June 2019 (1Q20), from RM6.7 million a year ago, on a 60.8 per cent rise in revenue to RM94.4 million from RM58.7 million previously.
The group’s strong 1Q20 performance was mainly due to higher demand for industrial properties resulting from Malaysia’s economic growth, investments in the manufacturing sector as well as ongoing US-China trade tensions.
AME’s IPO entailed the public issue of 85.4 million new shares at an issue price of RM1.30 per share, representing 20.0 per cent of the group’s enlarged share base of 427.1 million shares.
The entire IPO raised a total of RM166.6 million, of which RM111.1 million would primarily be utilised for business expansion, while the remaining RM55.5 million would go to shareholders via an offer-for-sale.
From the proceeds raised for business expansion, RM69.1 million will be allocated for future industrial property development and investment projects, RM23.0 million will be utilised as working capital for the i-Park @ Senai Airport City development, RM9.0 million will be set aside to complete the expansion of the group’s precast concrete fabrication capacity, and the remaining RM10.0 million for the defraying of listing expenses.