KUALA LUMPUR: KJTS Group Bhd aims to enhance its regional footprint as it heads for a listing on the Ace Market of Bursa Malaysia on Jan 26.
Out of the total proceeds of RM58.87 million from the initial public offering (IPO), a significant portion will be utilised for expansion purposes from this year until 2026.
Managing director Lee Kok Choon said 68.7 per cent or RM40.42 million of the total will be utilised for expanding its cooling energy segment in Malaysia.
This includes financing the engineering, procurement, construction and commissioning (EPCC) of cooling energy systems as part of the company' cooling energy management services and standalone EPCC of cooling energy systems contracts.
"Simultaneously, we aim to enhance our regional presence by renovating and expanding our offices. In Malaysia, we are identifying a larger office space in Klang Valley, with plans to finalise the location in the fourth quarter (Q4) of 2024 and complete renovation by Q1 2025.
"In Thailand, we are relocating and renovating our office in Bangkok, expecting to finalise the location and commence renovation in Q4 2024, with the move scheduled for Q1 2025.
"In Singapore, we plan to renovate our existing office in Tradehub 21 to increase usable working and storage space, with renovation set to begin in Q4 2024 and conclude within three months. These strategic moves align with our commitment to growth and operational efficiency in these key markets," Lim told Business Times.
KJTS Group is focused on building support services, with a key emphasis on cooling energy, cleaning and facilities management services.
In the cooling energy segment, the company specialises in cooling energy management services and EPCC including new, retrofitting, and/or upgrading of cooling energy systems.
"Our cleaning services are focused on ensuring the cleanliness, tidiness, and hygiene of buildings and facilities.
"Meanwhile, our facilities management services cover the repair and maintenance of M&E machinery and equipment, process utilities such as plumbing, drainage, and sewerage, as well as F&B and retail outlet equipment."
Lee said its customers are mainly made up of property owners and developers, manufacturers and business operators. They also include intermediaries such as main contractors, concession holders and equipment suppliers.
He said its established 39-year track record in cooling energy services has set the company apart from its peers.
"In addition, we expanded our cleaning services into Singapore in 2019, and our cooling energy services into Thailand in 2021, demonstrating our market presence and successful market expansions.
"The cross-selling synergy of our building support services, including EPCC, cooling energy system management, cleaning and facilities management services, contributes to our solid foundation.
"In addition, our in-house engineering capabilities support the complete cooling energy system lifecycle, fostering self-reliance and enabling business and financial sustainability.
" Aligning with the growing awareness of ESG, our services offer tangible contributions to customers' carbon reduction efforts.
"With continuous revenue streams from recurring income and long-term contracts, a seasoned leadership team, and a central command centre enhancing operational efficiency, we are well-positioned for sustained growth and market expansion," said Lee.
KJTS' business model features two revenue streams namely recurrent revenue and lump-sum project-based revenue.
Recurrent revenue which makes up the majority of its income, is derived from services and management fees. This includes maintenance and management services with monthly fixed fees, recognised during the contract period.
In addition, recurrent revenue also includes income from the supply of chilled water in some cooling energy management system contracts.
Contrary to fixed fees, certain contracts feature variable monthly fees primarily from the supply of chilled water.
"On the other hand, lump-sum project-based revenue is recognised over the contract period based on the proportion of work done and completed, primarily from EPCC of cooling energy systems and building construction projects. T
"These projects involve specific scopes of work with defined deliverables, commencement and completion dates. Additionally, we generate lump-sum project-based revenue on an ad hoc basis for cooling energy management and facilities management services," he said.
KJTS' primary markets include Malaysia, Singapore and Thailand where the entirety of its revenue was derived during the reviewed period.
In the financial year 2022 (FY22), Malaysia accounted for RM 71.02 million (75.20 per cent), Singapore contributed RM 18.89 million (20.01 per cent), and Thailand generated RM 4.53 million (4.79 per cent).
"Malaysia stands as our largest overall market, with Singapore being the predominant foreign market. It's worth noting that we initiated operations in Thailand and began recognising revenue from the country starting in FY21," added Lee.
As the listing date draws closer, Lee said the market dynamics on the listing day are influenced by various factors and are subject to market conditions.
"However, we are genuinely looking forward to the buzz and positive vibes around our IPO.
"The market has its own rhythm, and we aim for a successful listing and look forward to the market's response to our IPO," said Lee.