KUALA LUMPUR: KJTS Group Bhd, which is slated to be listed on the Ace Market of Bursa Malaysia this month, aims to enhance its regional footprint using the proceeds from its initial public offering (IPO).
Out of the total proceeds of RM58.87 million, it will utilise a significant portion for expansion purposes from this year until 2026.
Managing director Lee Kok Choon said about 68.7 per cent or RM40.42 million, of the total amount will be utilised for the expansion of its cooling energy segment in Malaysia.
"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," he told Business Times.
KJTS Group is focused on building support services, with a key emphasis on cooling energy, cleaning, and facilities management services.
The cleaning services are focused on ensuring the cleanliness, tidiness, and hygiene of buildings and facilities.
"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.
Lee said its customers are mainly property owners, real estate developers, manufacturers, business operators, and contractors.
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.
Recurrent revenue also includes income from the supply of chilled water in some cooling energy management system contracts.
"Lump-sum project-based revenue is recognised over the contract period based on the proportion of work done and completed, primarily from EPCC cooling energy systems and building construction projects.
"These projects involve specific scopes of work with defined deliverables, commencement dates, 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, which contribute a bulk of the revenue.
In the financial year 2022 (FY22), Malaysia accounted for RM71.02 million (75.2 per cent), Singapore RM18.89 million (20.01 per cent), and Thailand RM4.53 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.