KUALA LUMPUR (Dec 6): PublicInvest Research has valued ACE Market-bound Jati Tinggi Group Bhd at 35 sen, based on a 14 times price-earnings multiple to its earnings per share of 2.5 sen forecast for the financial year ending Nov 30, 2024 (FY2024).

In a note on Wednesday, the research house said the underground and overhead utilities engineering services and solutions provider’s growth will be driven by: i) the establishment of its presence as a main contractor; and ii) its geographical expansion to Sabah and Sarawak.

Jati Tinggi’s initial public offering (IPO) is expected to raise approximately RM18 million from the issuance of 66.8 million new shares.

Besides utilising 38.8% of the proceeds for repayment of bank borrowings and 40.7% for general working capital, 1.1% of the proceeds would be allocated for capital expenditure.

PublicInvest said Jati Tinggi’s competitive strengths include: i) its proven track record; ii) project management and delivery enhancement with technology tools; iii) an experienced senior management team; and iv) a technically competent project team.

“Key drivers may include: i) growing demand for electricity following economic growth, population growth as well as urbanisation; ii) government initiatives to strengthen accessibility to utilities; iii) opportunities arising from Malaysia’s aspirations for higher adoption of renewable energy; and iv) foreign and domestic investments,” the research house said.

Jati Tinggi is tentatively slated to be listed on Bursa Malaysia on Dec 20.