Kuala Lumpur, Dec 6: Jati Tinggi Group Bhd (JTGROUP) has made a strategic move to fortify its position in Malaysia’s utility engineering sector by announcing its initial public offering (IPO).
The company, known for its expertise in underground and overhead utility engineering services, aims to transition into a key player in infrastructure utilities engineering projects.
The IPO, detailed in the prospectus released by Public Investment Bank Berhad, is set to raise approximately RM18.0 million through the issuance of 66.8 million new shares.
The funds will be allocated for purposes such as repaying bank borrowings, bolstering working capital, and facilitating capital expenditure.
JTGROUP, through its wholly-owned subsidiary, has been instrumental in supporting Malaysia’s electricity supply industry, with a focus on telecommunications, water, and sewerage utilities.
Notably, the company’s major customers during FY20 and 1HFY23 were main contractors appointed by Tenaga Nasional Bhd (TNB).
With aspirations to become a main contractor for infrastructure utilities engineering projects, JTGROUP plans to explore direct tendering opportunities with TNB.
Geographical expansion is also on the agenda, with the company eyeing a footprint in East Malaysia.
The company’s IPO comes with ambitious growth targets, positioning JTGROUP as a major player in Malaysia’s power infrastructure utilities market.
The prospectus outlines key growth drivers, including efficient project management, a seasoned senior management team, and a technically proficient project workforce.
Financially, JTGROUP projects a revenue of RM162.6 million, a net profit of RM9.9 million, and earnings per per cent share (EPS) of 2.5 sen for the year 2024. The price-to-earnings ratio (P/E) is estimated at 10.7x, with a dividend yield of 1.9 per cent.
While the company is on a positive trajectory, the prospectus highlights potential risks, including market competition, dependencies on major customers and subcontractors, and the possibility of contract terminations.
However, the company is well-positioned to leverage Malaysia’s energy transition efforts, with substantial capital expenditure expected for electricity generation, transmission, and distribution projects.
The fair value of JTGROUP is pegged at RM0.35, based on a 14x PE multiple to the FY24F EPS of 2.5 sen.
The IPO, set at an estimated price of RM0.27, is expected to raise RM18.0 million, resulting in a market capitalization of RM105.8 million.
Potential investors are urged to conduct thorough research and seek professional advice before making investment decisions. The information provided is based on the IPO prospectus released by Public Investment Bank Berhad.
On an overall basis, JTGROUP’s IPO signals a significant opportunity for investors to participate in Malaysia’s dynamic utility engineering sector. With strategic plans in motion and a focus on becoming a main contractor, JTGROUP is poised to play a pivotal role in the nation’s evolving infrastructure landscape.
Update as of December 8: Jati Tinggi Group Berhad’s IPO Oversubscribed 16.11 Times
Jati Tinggi Group Berhad (“Jati Tinggi”), a significant player in the infrastructure utilities engineering industry, is delighted to announce the overwhelming response to its initial public offering (IPO) for the Malaysian public, surpassing expectations with a remarkable oversubscription rate of 16.11 times.
Jati Tinggi’s IPO involves the issuance of 66,800,000 new ordinary shares in the following distribution:
- 19,600,000 Public Issue Shares for the Malaysian public
- 10,000,000 Public Issue Shares for eligible directors, employees, and contributors to the company’s success
- 23,200,000 Public Issue Shares by private placement to selected investors
- 14,000,000 Public Issue Shares by private placement to approved Bumiputera investors
- Offer for sale of 35,000,000 existing ordinary shares in Jati Tinggi via private placement to selected Bumiputera investors
The IPO received a total of 5,195 applications, amounting to 335,377,600 Public Issue Shares from the Malaysian public, reflecting an impressive oversubscription rate of 16.11 times. The Bumiputera portion garnered 2,879 applications for 145,127,600 Public Issue Shares, resulting in an oversubscription rate of 13.81 times. The remaining Malaysian public portion attracted 2,316 applications for 190,250,000 Public Issue Shares, achieving an oversubscription rate of 18.41 times.
The 10,000,000 Public Issue Shares reserved for eligible parties have been fully subscribed.
Datuk Ir. Mohd Aminuddin Bin Mohd Amin, Independent Non-Executive Chairman of Jati Tinggi Group Berhad, expressed gratitude for the market’s confidence, stating, “The oversubscription of our IPO is an affirmation of the market’s confidence in our business strategies and future growth. This level of investor enthusiasm fortifies our commitment to keep driving forward our plans in the infrastructure utilities engineering industry.”
TA Securities Holdings Berhad, the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the IPO, confirmed the full placement of the 23,200,000 Public Issue Shares made available by private placement to selected investors.
Jati Tinggi is scheduled for listing on the ACE Market of Bursa Securities on Dec 20.
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