Tuju Setia eyes further growth post-IPO

Successful launch: One of Tuju Setia’s completed projects is Menara TCM in Kuala Lumpur.

MAIN market-bound Tuju Setia Bhd will continue to be a growth company after it is listed.

The construction services company which will be listed on May 19 says it is firmly on a visible growth path ahead with a strong order book that it would be delivering in the next couple of years.

“For this year itself, we have a very big work volume to implement. In fact, after we recommenced operations after the movement control order (MCO) in May last year, we have been busy (topping up) the order book, ” Tuju Setia’s founder and managing director Wee Eng Kong tells StarBizWeek.

Its order book is more than RM953.1mil which it expects would last the company for the next two to three years, while its tender book is at RM4bil presently.

“We are in the active growth stage of the company at the moment. This is why we would like to focus on our strengths as we are anticipating a very healthy growth and we foresee positive times ahead, ” Wee says.

“Over the past four years, we had seen an uptrend in profitability in both pretax and net profit margins. This uptrend is also seen in 2020 even in spite of the Covid-19 pandemic due to a number of factors, ” he adds.

Wee says the increase in profitability is due to its investments in the industrialised building systems (IBS) leading to an improvement in the company’s overall cost efficiency.Wee says the increase in profitability is due to its investments in the industrialised building systems (IBS) leading to an improvement in the company’s overall cost efficiency.

Wee says the increase in profitability is due to its investments in the industrialised building systems (IBS) leading to an improvement in the company’s overall cost efficiency.

“More importantly, we have also implemented value engineering with the use of computer softwares that has helped our profitability. What sets us apart is that our operations are based on strong fundamentals. Over the past four years we have been in a net positive cash position, ” he says.

Wee says that Tuju Setia’s gross profit margin is currently at circa. 9%.

Along with the company’s plans to capture more growth for itself, Tuju Setia will also have in place a dividend policy of distributing 25% of its net profit as dividends.

The growth will be driven by the pipeline of construction projects it has at the moment, of which it is a construction contractor for a number of property development projects.

Wee says the company is a construction company and is not involved in the property development business.

“We have aligned this company to focus in the near to medium term in our core business and expertise which is in the area of high rise property construction and to also capitalise on our reputation we have in the market. In 2020, the residential and non-residential high rise construction comprised some 80% of our revenue while design and build comprise the remainder 20%, ” he says.

Wee says Tuju Setia also has built up its experience and expertise in the area of designing and building hospitals and healthcare facilities.

“These are the areas which we have built up and we would be focusing on these areas, ” he says.

Wee adds that the company has a strong existing clientele that had contributed to its growth.

“We are very encouraged by this support given to us. These are good brand names in the market that have trusted in us to continuously award us with projects, ” he says.

“We select only reputable developers and this had seen a positive uptrend of financials in the preceding years, ” Wee adds.

The planned listing exercise is a natural progression for the company which had been planned over the past few years.

“Our view is that this strategy (to list) is very important for us as it would help weather us through the storms. We have also managed to weather well through the recent trying times including the recession and the Covid-19 outbreak which began last year, ” Wee says.

“In fact in the 2020-2021 period, we have obtained four high rise residential project construction contracts over this period, despite the pandemic. This includes the Tuai Residence, Riana Dutamas Phase 2 under IJM, The Pulse Residence which is another high rise in Puchong and more recently the 121 Residences in Petaling Jaya, ” he adds.

The listing of Tuju Setia would see a public issuance of 80 million new shares and an offer for sale portion of 27 million existing shares.

Through this listing, the company will raise RM56mil through the issuance of new shares at 70 sen each.

Upon its listing, Tuju Setia will have a market capitalisation of RM222mil.

Wee is meanwhile particularly positive on the prospects of its expertise in building hospitals and healthcare facilities moving forward.

A project that it has on hand which is slated to complete in March 2022 is the design and construction of the new women and children complex for the Kajang Hospital (Kajang Women and Children Hospital).

This is the first project of this kind where it is involved in the design and construction of a hospital.

Tuju Setia is the main contractor for this project through its wholly owned subsidiary Pembinaan Tuju Setia Sdn Bhd.

This project will see the company constructing a 9-storey building block with 272 beds and a multi-storey car park, including a mechanical and electrical building.

“We have a very strong forte in the building and designing of hospitals and healthcare facilities and we are focused on (building up) this area now. We find that this is important especially in going through the recession that begun last year and through the Covid-19 pandemic. Under my personal experience, in the early days I was also involved in the implementation of the Putrajaya Hospital and the Putrajaya Health Clinic, ” Wee says.

“The company is also registered with the Construction Industry Development Board under the B29 category which lets us undertake construction of hospitals and healthcare facilities. This is a prerequisite for contractors which would like to undertake the construction of hospital and healthcare facilities, ” he adds.

Over the past 15 years, Wee says Tuju Setia had completed about 18 high rise projects and as high as 51 levels.

Its clientele consists of public listed property developers including: SP Setia Bhd, Symphony Life Bhd, the Works Ministry (government), Guocoland (M) Bhd, Top Glove Corp Bhd and Tropicana Corp Bhd.

It other clients also include Perdana ParkCity Sdn Bhd, Tropicana Corp Bhd, Bandar Raya Developments Bhd, IJM Corp Bhd and UEM Sunrise Bhd.

“In addition to the B29 certification, we are a Grade G7 contractor (registered in 2006) which allows us to undertake projects with unlimited value.

“We have also the Certificate of Government Procurement Works (SPKK) to participate in government project tenders, ” Wee says.

The company is also accredited with the ISO 9001:2015 Quality Management System for the provision of project management for construction of buildings and engineering works.

“Many of our projects are assessed by QLASSIC and CONQUAS quality certifications, and SHASSIC assessment for health and safety performance, ” he says.

Its other notable non-residential projects that have been completed include SetiaWalk, Setia Sky Residences (Celeste & the Divina Tower), TWY Mont Kiara, Geo Bukit Rimau, Top Glove Corporate Office Tower, Menara TCM and St. Joseph’s Institution International School Malaysia.

While its other already completed residential projects include Mentari Court, Grand Medini Residence, and the Idaman Residence.

Moving forward, Tuju Setia sees the construction industry would continue to recover and demand to hold up well in spite of the


It is also anticipates that the momentum for projects to continue into the foreseeable future.

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Tuju Setia , construction , uptrend , profits , Wee Eng Kong ,


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