KUALA LUMPUR: Construction-based Haily Group Bhd made a firm debut on the ACE Market on Wednesday, opening at 79 sen or 11 sen above its offer price of 68 sen amid a lacklustre broader market.
At 9.03am, it was trading at 78.8 sen. There were 37.86 million shares done at prices ranging from 76 sen to 81.5 sen.
The FBM KLCI fell 1.26 points or 0.08% to 1,518.71. Turnover was 225.45 million shares valued at RM123.76mil. There were 169 gainers, 127 losers and 307 counters unchanged.
Haily chairman Mohd Jaffar Awang (Ismail) said tThe listing marks an important milestone for Haily as it successfully brings the group to greater heights, and everything began from the humble beginnings of our founders See Tin Hai and Madam Kik Siew Lee in 2007.
“I believe that the listing exercise will help to unlock the potential of the Group by enhancing our reputation as we market our construction services and expand our customer base in Malaysia,” he said.
At the virtual listing ceremony, he said Haily plans to continue focusing on its core competency in building construction in Johor while leveraging on its experience to extend its reach to the other districts.
“Our group will be able to leverage on our capabilities as a Grade G7 contractor which allows us to bid and carry out any size of building construction projects irrespective of the contract value.”
Haily has completed 65 building construction projects with a total contract value of RM1.29bil since 2008.
“We have on-going projects that can sustain us at least until 2023. Currently, Haily has 18 building construction projects as well as 2 civil engineering related construction projects. The total secured contract value and unbilled contract value as at 10 June 2021 stood at RM460.04mil and RM249.58mil,” he said.
Mohd Jaffar said the group plans to expand into industrial building construction to address opportunities provided by economic developments in Johor, adding that the Group had completed 6 industrial building construction projects with a total of 68 in the districts of Johor Bahru and Kulai.
On its dividend policy, the group intends 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/guaranteed commitment to the shareholders.
Its public issue under the IPO was oversubscribed by 38.81 times. There were 13,367 applications for about 355.1 million new public issue shares with a value of RM241.47mil.
The other portion of 10 million new public issue shares available for application by the eligible directors and employees of the group and persons who have contributed to its success have also been fully subscribed.
It raised RM20.4mil from its IPO. Haily plans to use RM4.20mil (20.59%) for the purchase of construction machinery, equipment as well as new contract management and accounting software and office equipment, RM6mil (29.41%) for working capital for construction projects, RM7mil (34.31%) for repayment of bank borrowings, and the remaining RM3.2mil (15.69%) for listing expenses.
TA Research said at an IPO price of 68 sen a share, Haily is priced at a trailing price-to-earnings ratio (PER) of 11.9 times FY20 core EPS.
“We value the company at 12 times CY22 EPS, arriving at a fair value of 83 sen a share,” it said.
Haily posted a net profit of RM2.79mil on revenue of RM43.3mil in the first quarter ended March 31.
The revenue was mainly contributed from the group’s construction of residential and non-residential buildings which accounted for RM43.21mil or 99.80% of the total revenue, while the balance of RM90,000 was derived from its civil engineering construction works and rental of construction machinery and equipment.
As at June 10, Haily had 18 on-going building construction projects as well as two civil engineering related construction projects.
Its total secured contract value and unbilled contract value stood at RM460.04mil and RM249.58mil respectively.