BURSA Malaysia will be receiving another newcomer on July 21, namely Haily Group Bhd, a contractor involved in the construction of residential and non-residential buildings in Johor.
Haily Group was founded by See Tin Hai and his wife Kik Siew Lee.
The company has launched its prospectus on June 30, aiming to raise RM20.4mil from its upcoming listing on the ACE Market of Bursa Malaysia Securities through an initial public offering (IPO) exercise.
The IPO entails a public issue of 30 million shares at RM0.68 each and will be closed for application on July 7.
Of the 30 million shares, it is offering 8.92 million shares to the public, 10 million to eligible directors, employees, and persons who have contributed to the group’s success, and 11.08 million to selected investors by way of a private placement.
Additionally, there will be an offer for sale by its promoter that involves 18 million existing ordinary shares in Haily by way of a private placement to selected investors. Its promoters are Haily Holdings Sdn Bhd, See, and Kik.TA Securities Holdings Bhd is the principal adviser, sponsor, underwriter, and placement agent in relation to the IPO.
Bringing the company to next level has been the couple’s dream since a decade ago. Haily is also named after the couple’s combined Chinese name, which symbolises their determination in growing the company.
After much hardwork and important contribution from their key management and team, finally, the listing will materialise this year.
See, who is also the executive director of Haily tells StarBizWeek: “As a Grade 7 contractor with CIDB, we are allowed to bid and carry out any size of building construction projects irrespective of the contract value. The listing exercise is an important step to increase the stature of Haily, thus enhancing our reputation as we market our construction services and expand our customer base beyond Johor.”
Haily’s core competency is building construction in Johor. The group plans to continue focusing on building construction while leveraging its experience to extend its reach to the other districts.
The listing exercise will help accelerate this and enable it to purchase new construction machinery and equipment in anticipation of future growth.
He shares that Haily has 18 ongoing building construction projects as well as two civil engineering-related construction projects.
Its total secured contract value and unbilled contract value currently stands at RM460.04mil and RM249.58mil, respectively. The ongoing projects are expected to be completed progressively between 2021 and 2023.
One must be wondering about the track record of Haily in the competitive construction industry.
The company has completed 65 building construction projects with a total contract value of RM1.29bil since 2008.
Its list of clients is a testimony of its quality and services. It is not difficult to find some familiar names from the prospectus.
Haily’s clients include subsidiaries of public-listed companies such as Mah Sing group of companies, IOI group of companies, IJM group of companies, and private companies such as Country View Resources Sdn Bhd and AME Development Sdn Bhd.
See says the listing exercise will also help to expand Haily’s business further, of which it will utilise the proceeds for capital expenditure and working capital. The company will also use part of the proceeds to repay bank borrowings and for listing expenses.
The movement control order has not stop Haily from embarking on its listing journey.
The company is optimistic on the long-term prospects of the construction industry, taking into consideration its healthy cash position, expected profits to be generated from its operations, the amount that is available under its existing banking facilities and proceeds expected to be raised from the public issue.
See says Malaysia’s economy is expected to gradually improve in the second half of 2021, underpinned by key growth drivers such as continued improvement in global growth, trade and technology cycle, upcoming large-scale infrastructure projects, and economic stimulus measures.
“The growth of the residential and industrial sector in other districts of Johor will provide opportunities for the group, and we have secured and unbilled contracts that can sustain us through the near-term challenges brought about by the Covid-19 pandemic, ” he adds.
On the potential reward to its shareholders, Haily plans to distribute dividends of at least 30% of its annual profits attributable to its shareholders upon completion of the listing. However, it is not a legally binding obligation or guaranteed commitment to the shareholders.
Dividends declared and distributed by the group for the financial year (FY) 2017, FY 2018, FY 2019 and FY 2020 were RM10.01mil, RM5.25mil, RM6.00mil and RM2.50mil respectively.