KAB MAKES STRONG ACE MARKET DEBUT
Stock closes 5 sen higher from offer price, most active with 159.92 million units traded
KEJURUTERAAN Asastera Bhd (KAB) made a firm debut on Bursa Malaysia’s ACE Market yesterday, opening 32 per cent higher at 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 board’s most active counter, with 159.92 million shares traded.
The company issued up to 80 million new shares to raise RM20 million. There was also an offer for sale of 32 million shares by way of private placements to institutional and selected investors.
Of the RM20 million in proceeds, KAB plans to use RM12.1 million for working capital, RM2.6 million for purchase of materials and components, and RM2 million for human resources.
Another RM2.2 million is being earmarked for capital expenditures, RM1.6 million for repayment of borrowings and RM3.5 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 plans is to focus on previously un- tapped areas, such as the retrofitting and refurbishment of aged buildings.
“Further, with more affordable housing projects being 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 wellpositioned to grow its market share and strengthen its mechanical engineering services capabilities,” he said in a statement.
Maybank Investment Bank (Maybank IB) said KAB growth was imminent as its listing would support its expansion plan.
“Pursuant to this initial public offering, it will have a stronger balance sheet to support its expansion plans, which includes tendering for bigger jobs and growing its mechanical engineering services,” said the research house.
The government’s initiatives to promote affordable housing programmes nationwide and the rising need for building upgrading, expansion, refurbishment, retrofitting and renovation would drive demand for electrical and mechanical services, it added.
Maybank IB added that Kejuruteraan Asastera has an outstanding order book of RM216.9 million at end-May this year, which would be progressively recognised over financial years 2017 to 2019.
KAB has almost 20 years of experience
in the electrical and mechanical engineering services industry.
It is registered with the Energy Commission of 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 Construction Industry Development Board as a Grade “G7” licence holder, allowing the group to tender for electrical projects of unlimited value.