Fortune-changing contract

FOR a company that is making little money and has a construction and property division that is dwarfed by its manufacturing operations, Kumpulan Jetson Bhd’s ability to score a huge contract worth RM919mil is certainly surprising.

The contract, which is for sub-contracting work from MCC Overseas (M) Sdn Bhd, involves work being done on a massive property development at Jalan Conlay in Kuala Lumpur. MCC Overseas is a subsidiary of China Metallurgical Group Corp, a huge Fortune 500 company that is listed in Hong Kong and Shanghai.

The project Kumpulan Jetson is helping to build includes 61-storey and 56-storey service apartments, a 72-storey hotel and other aspects of the development in the heart of Kuala Lumpur.

Kumpulan Jetson says the project is expected to contribute positively to its earnings for the financial years ending 2017 to 2021. For a company that made a profit of RM296,000 in its last financial quarter, the latest contract it has secured should be enormous to its bottom line. In fact, some are projecting the company to make a profit over the four years that is equivalent or more than its current market capitalisation.

The latest win is the second contract win in recent times for the company that has ventured into property development in a larger way. And interestingly, the contract it secured in late February this year was one where it partnered with China Communications Construction Co Ltd to jointly secure an RM201.87mil subcontract to build a stretch of the 31.8-km Sungai BesiUlu Kelang Elevated Expressway.

What is surprising is the partners of Kumpulan Jetson. Winning work from China companies is what a number of contractors would gleefully accept, but it would appear that Kumpulan Jetson’s lucky streak coincides with the entry of Phoa Boon Ting as a substantial shareholder in the company in December last year. Phoa had raised his stake to just over 10% of Kumpulan Jetson by February this year.