KUALA LUMPUR (Jan 26): Building support services provider KJTS Group Bhd is eyeing double-digit growth for the financial years ending December 31, 2024 (FY2024) onwards on the back of strong demand for energy efficiency, as well as budding opportunities lying in the data centre (DC) space.
KJTS managing director Lee Kok Choon said the group is looking at strong demand for its energy management services in 2024, given energy prices and rising awareness of environmental, social, and corporate governance (ESG) aspects.
“I believe demand is going to continue to be strong — in terms of growth, we are looking at at least double-digit growth from 2024 onwards,” Lee said during a post-listing press conference on Friday.
KJTS sees ample opportunity for growth given the abundance of up-and-coming greenfield projects in the region as well as brownfield projects that have been developed in the region over the past decades, according to group executive director Sheldon Wee.
“These are all fantastic opportunities for us because people need to save energy. Generally, the demand for energy efficiency is more than ever now, and I can tell you from a market perspective that it is massive in Malaysia and throughout the region,” he added
Since 2022, the government has lifted Covid-19 era electricity tariff rebates for industrial players — with low-voltage non-domestic consumers now facing a 3.7 sen surcharge per kWh, and medium and high voltage non-domestic users facing a 17 sen surcharge per kWh under the current imbalance cost pass-through (ICPT) mechanism cycle.
A bulk RM44.92 million of the group’s RM58.87 million initial public offering (IPO) proceeds are to go towards the expansion of its cooling energy segment — which also includes cooling energy management services.
KJTS made its debut on the ACE Market of Bursa Malaysia on Friday at a 62.96% or 17 sen premium to 44 sen, from its initial public offering (IPO) price of 27 sen.
At the time of writing, it has climbed further to 46.5 sen with 74.31 million shares traded — making it currently the second top active counter on the local bourse.
Besides cooling energy solutions, KJTS also provides building cleaning and facilities management services.
The group recorded a net profit of RM3.76 million for the third quarter ended September 30, 2023 (3QFY2023) on a topline of RM30.01 million. For the nine months ended September 30, 2023 (9MFY2023), cumulative net profit stood at RM5.93 million, while revenue was at RM88.4 million.
Prime opportunity seen in recent data centre development influx
During the press conference, Lee shared that KJTS is in active engagement with various DC owners and main contractors concerning the group’s involvement in DC-related projects, in line with its strategic business expansion.
“We are definitely in talks with some of the DCs, either owners directly or main contractors," Lee said.
"We will announce as things progress, but having said that, we also need to be very selective in terms of the plausibility and who we are dealing with. We have to be very careful with the funds that we have raised,” he added.
Cooling systems are a major component of DCs due to heat generated by the centres’ hardware. Due to Malaysia’s naturally hot climate, DCs that operate in the country have higher energy consumption — stressing the importance of energy efficiency.
Despite the drawback, Malaysia has still managed to draw in a substantial amount of investments related to DCs over the years.
Between 2021 and March 2023, Malaysia has attracted RM76 billion worth of investment related to DC development, according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.