KUALA LUMPUR: AME Elite Consortium Bhd (AME), which made a strong debut on the Main Market of Bursa Malaysia, is upbeat about its growth prospects as it positions itself to meet demand for industrial properties resulting from the ongoing US-China trade war tensions.
Speaking at the company’s listing yesterday, its group managing director Kelvin Lee Chai said that the group would leverage on its enhanced profile as a listed entity and the IPO proceeds raised, to execute plans for its integrated i-Park industrial parks in Johor as well as to replicate the i-Park brand in other states in Peninsular Malaysia.
“The holistic approach taken for our industrial parks by providing full-fledged services including workers’ accommodation and recreational facilities have been major defining factors in attracting multinational corporations to our award winning i-Parks, particularly in light of increasing enquiries resulting from the US-China trade tensions.
“We are also hopeful of expanding our dormitories’ facilities to cater further to the requirements of multinational and local corporations. In doing so, this will increase our recurring income stream in the future which further enhances our prospects, ” he said.
AME is a total solutions provider for industrial parks and factory units.
The stock opened at RM1.28 sen, or two sen below its offer price of RM1.30. However, strong buying interest saw its share price climb to a high of RM1.59, before closing at RM1.55 or up 25 sen at the end of the day. A total of 49.75 million shares were done.
The company’s offer of 8.54 million new shares to the public was oversubscribed by 4.39 times.
AME’s IPO consists of a public issue of 85.4 million new shares along with an offer-for-sale of 42.7 million existing shares, at an issue price of RM1.30 per ordinary share.
AME raised RM111.10mil from the offer of new shares and most of the proceeds would be used to expand its business.
Its net profit almost doubled to RM13.1mil for the first quarter ended June 30,2019 from RM6.7mil a year ago.
The strong earnings growth was due to higher demand for industrial properties as a result of Malaysia’s economic growth, in addition to investments in the manufacturing sector and the ongoing US-China trade tensions.
In a research note, Affin Hwang Capital Research said AME benefits from rising demand for industrial properties in Malaysia due to trade diversion amidst the ongoing US-China trade war.
“We initiate coverage on AME with a Buy call and target price of RM1.83, based on 30% discount to revalued net asset value, ” the research house said.
Affin Hwang noted that the company has a construction and engineering services order book of RM376.9mil, equivalent to 1.4x FY19 revenue, to be completed by Q2FY21. For the property development division, it has remaining industrial
land with gross development value (GDV) of RM1.61bil, mainly in two of itsindustrial parks in Johor, ie, i-Park@Indahpura and i-Park@Senai Airport City (SAC). The RM150mil acquisition of a 77-acre land for i-Park@SAC phase 3 expansion added another RM555mil to the total GDV, it added.
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