Sunway Construction makes lukewarm debut


  • Business
  • Wednesday, 29 Jul 2015

KUALA LUMPUR: RHB Investment Bhd mopped up 4.14 million shares in Sunway Construction Group Bhd from the open market to help keep the newly-listed stock afloat on its maiden day on Bursa Malaysia.

Shares in Sunway Construction was last traded at RM1.20 yesterday with 158 million shares done.

The company sold its shares last month to the public at RM1.20 each to raise RM478.4mil for its parent company. The share sale was the second biggest initial public offering (IPO) this year after Malakoff Corp Bhd.

Sunway Construction’s IPO comes at a challenging time amid a broader pullback in the stock market. The FTSE Bursa Malaysia KLCI declined 10 points, or 0.59%, to 1,669.7 points.

“Sunway Construction has enough capital on its own,” its managing director Kwan Foh Kwai told reporters after the listing ceremony yesterday.

Kwan noted that the construction firm didn’t have a big exposure in residential property construction business, which was currently facing a slowdown in demand.

As of March 31, SunCon’s orderbook stood at RM2.8bil, of which about 40% is in infrastructure, 50% in buildings and the remaining 10% in supply of precast concrete products to projects in Singapore.

He said that the company was also mulling to expand its operation in the overseas market focusing on Asean countries.

Sunway Construction has an operation in Singapore, where 30% to 40% of its profit comes from, according to Kwan.

He said the group was currently bidding for about RM11bil in projects.

He said infrastructure projects such as Mass Rapid Transit (MRT) Line 2 and Light Rail Transit (LRT) Line 3 were among the target projects.

“By year-end, we are targeting to increase our tenderbook up to RM20bil,” Kwan said.

Sunway Construction is involved in projects such as the MRT, LRT, BRT, the Kuala Lumpur Convention Centre and Sunway Pyramid shopping mall.

Sunway’s construction division is making a comeback to Bursa Malaysia after an 11-year hiatus.

The company has promised to return 35% of its annual net profit as dividends.

SunCon posted a net profit of RM34.36mil for its first quarter ended March 31, 2015. It reported a revenue of RM496.06mil for the quarter.

RHB Investment Bank Bhd is the principal adviser and together with Maybank Investment Bank, is the joint global coordinator and joint underwriter.

The two banks plus Hongkong and Shanghai Banking Corp’s Singapore branch are joint bookrunners.

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Business , Sunway Construction , debut , IPO

   

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