KJTS Group Bhd prospectus launch in conjunction with its upcoming listing on the ACE Market of Bursa Malaysia: (From left): KJTS independent non-executive director Dr Teoh Pek Loo, KJTS independent non-executive director Ng Kok Ken, KJTS executive director Sheldon Wee Tah Poh, Hong Leong Investment Bank Bhd group managing director and chief executive officer Lee Jim Leng, KJTS managing director Lee Kok Choon, KJTS independent non-executive director Elaine Law Soh Ying, and Hong Leong Investment Bank Bhd head of equity markets Phang Siew Loong at the Sofitel Kuala Lumpur Damansara Hotel in Kuala Lumpur on Friday, Jan 5, 2024. (Photo by Shahrill Basri/The Edge)

KUALA LUMPUR (Jan 5): ACE Market-bound building support services provider KJTS Group Bhd has set its retail price at 27 sen per share, aiming to raise about RM58.9 million under the listing exercise.   

Based on the retail price of 27 sen per share, KJTS is expected to have a market capitalisation of RM185.76 million upon listing, implying a valuation of 26 times its profit after tax (PAT) attributed to owners of the company of approximately RM6.87 million and earnings per share of one sen for the financial year ended Dec 31, 2022 (FYE2022).    

At its prospectus launch on Friday, KJTS said the initial public offering (IPO) will involve the issuance of 218.03 million new ordinary shares, representing 31.69% of the enlarged share capital.  

Out of these, 168.63 million shares or 24.51% are allocated to institutional and selected investors, while the remaining 49.4 million shares or 7.18% are for retail offering.   

The retail offering, meanwhile, consists of 34.4 million new shares or 5% for the Malaysian public via balloting, and 15 million new shares or 2.18% for the eligible directors, key senior management, employees and persons who have contributed to the success of KJTS and its subsidiaries.  

KJTS and its subsidiaries are principally a provider of building support services focusing on providing cooling energy, cleaning and facilities management (FM) services.  

For FYE2022, KJTS registered RM7.16 million PAT, up 19.73% from RM5.98 million PAT recorded in FYE2021, as revenue rose 10.78% to RM94.44 million from RM85.25 million.  

The cooling energy segment, in which KJTS offers cooling energy management services and engineering, procurement, construction and commissioning (EPCC) services, including new construction, retrofitting and upgrading of cooling energy systems, contributed the most to the group’s revenue in FYE2022 at 46.32%. 

This is followed by energy cleaning services, which focus on ensuring cleanliness, tidiness and hygiene of buildings and facilities (37.91%); and FM services, which focus on the repair and maintenance of machinery and equipment, process utilities including plumbing, drainage and sewerage, as well as retail outlet equipment (15.77%). 

The group’s PAT margin also increased to 7.58% in FYE2022, from 7.01% in FYE2021.  

Slated to be listed on Jan 26, KJTS said about RM40.42 million or 68.66% of its gross proceeds will go toward the expansion of its cooling energy segment in Malaysia to finance the EPCC of cooling energy systems. 

According to KJTS managing director Lee Kok Choon, the group’s value proposition is to help its customers — mainly multinational companies — to reduce the electricity consumption of their cooling systems, which can also contribute to their environmental, social and governance efforts by reducing carbon emissions. 

“We are seeing [that] a lot of industries are facing an increase in energy costs, so our focus is to reduce the costs. We foresee that energy costs will go up and the drive of wanting to reduce the costs will be very high,” he told reporters.  

Meanwhile, RM8.12 million will be used for the working capital, RM5.83 million for defraying the listing capital and another RM4.5 million for the expansion of its offices in Malaysia, Thailand and Singapore.   

Asked if the group has any plans to expand its business to other Southeast Asian countries, Lee said: “We are always looking for opportunities. I think there are many opportunities coming out from Malaysia, Thailand and Singapore. If we talk about expanding to other Southeast Asian countries, going to a new country is not [an] easy thing to do. However, if there is any good opportunity, we are definitely going to evaluate that”.  

Lee and KJTS’ executive director Sheldon Wee Tah Poh are currently the group’s largest shareholders, both holding 46.41% stakes, respectively. Post-listing, their stakes will be diluted to 31.7%, respectively.  

KJTS intends to distribute an annual dividend of 20% of its PAT attributable to its shareholders. 

Applications for the IPO are open and will close at 5pm on Jan 11. Hong Leong Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole bookrunner for the IPO exercise.