KUALA LUMPUR (Sept 24): Shares of KJTS Group Bhd (KL:KJTS) tested the highest level in nearly six weeks before ending a tad lower on Tuesday following the building support services firm's announcement of a RM24 million contract for works on a data centre project.

KJTS climbed as much as 7.5% or five sen to 71.5 sen, its highest since Aug 14, 2024. At 5pm, the counter pared its gains to close at 66 sen – down half a sen or 0.75% from the previous day’s closing of 66.5 sen – giving it a market capitalisation of RM454.1 million. Trading volume totalled 1.45 million shares. 

CIMB Securities, the only research house covering the stock, is positive on the contract that also marks KJTS’ foray into projects related to data centres.

“We believe this project will be a good stepping stone for KJTS to secure more DC-related works in the future,” the house said and maintained its ‘buy’ call and target price of 92 sen.

The stock has surged some 144% against its initial public offering price (IPO) of 27 sen since its listing in January on the Bursa Malaysia’s ACE Market, partly benefiting from investors’ frenzy over data centres.

On Monday, KJTS announced that it had secured a subcontract from Sunway Engie DC Sdn Bhd for works on a data centre in Johor's Sedenak Tech Park. The contract involves commissioning and maintenance of air-conditioning and mechanical ventilation pipework for the data centre.

Once the job is completed, KJTS could also be awarded with a cooling energy management services contract which involves long-term maintenance works, said CIMB Securities, noting that some of its operations and maintenance contracts were only awarded upon commissioning.

KJTS specialises in providing cooling energy, cleaning, and facility management services, primarily for the property industry.

The IPO raised some RM58.87 million from the sale of a 31.69% stake in the company to investors, with more than two-thirds of the proceeds earmarked for the expansion of its cooling energy segment in Malaysia.

For the second quarter ended June 30, 2024 (2QFY2024), KJTS recorded a net profit of RM3.73 million on a revenue of RM28.98 million.

Revenue was mainly driven by the cooling energy segment, contributing 41.25% of the group's total revenue for 2QFY2024, and the cleaning services segment within building support services, which contributed 49.12%.

Managing director Lee Kok Choon and executive director Sheldon Wee Tah Poh are the group’s largest shareholders, each holding a 31.7% stake. 

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