Construction firm Vestland makes firm debut on ACE Market

KUALA LUMPUR: Construction firm Vestland Bhd made its debut on the ACE Market at 38 sen a share, which represents a five sen or 15.15% premium over its initial public offering (IPO) price.

As at 9.40am, the share was trading eight sen or 24.24% higher at 41 sen a share.

The stock had seen 263.72 million units traded, making it the most active counter on Bursa Malaysia at the time of writing.

The company's IPO entail an offering of 240.8 million shares comprising a public issue of 170 million new shares and an offer for sale of 70.8 million existing shares.

Group managing director Datuk Liew Foo Heen had said in a statement the company plans to use the proceeds of its IPO for working capital to grow its operations.

Vestland is a growing Construction Industry Development Board grade 7 contractor, which through its wholly-owned subsidiary Vestland Resources Sdn Bhd, has been in the construction industry for 11 years.

Since 2020, the company's scope of work has enlarged to become a design-and-build contractor.

According to Rakuten Trade, the higher-margin design and build segment made up 69% of Vestland's unbilled orderbook of RM947.4mil as at Nov 28, 2022.

In light of this, it forecast Vestland to register 51.4% and 28% growth in net earnings in FY23 and FY24 respectively.

"'Buy' with a target price of 43 sen based on 12x price-earnings ratio, average price-earnings of its small capitalisation peers listed on Bursa Malaysia," said the brokerage in its IPO note.

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