Jati Tinggi makes solid debut on ACE Market

From left: Jati Tinggi chief financial officer Lee Tuck Wai, independent non-executive director Datuk Lim Yew Soon, independent non executive director Poon Lai Kit, executive director and COO Chin Jiunn Shyong, independent non-executive chairman Datuk Mohd Aminuddin Mohd Amin, managing director Datuk Seri Lim Yeong Seong, TA Securities executive director of dealing Datuk Hamzah Mohd Tahir, independent non-executive director Loo May Len, vice-president of corporate finance Vivien Hooi and Jati Tinggi commercial senior manager Teo Swee Hing.

KUALA LUMPUR: Jati Tinggi Group Bhd closed its maiden trading day on the ACE Market of Bursa Malaysia at 31 sen, a 15% premium over its initial public offering (IPO) price of 27 sen a share.

The infrastructure utilities engineering solutions provider was the third- most actively traded counter with 141.8 million shares changing hands during trading hours.

The stock price hit a high of 34 sen and low of 30 sen in intraday trade.

Jati Tinggi successfully raised RM18.04mil from its listing exercise.

The company intends to use RM7mil of the funds to repay bank borrowings and RM7.34mil for general working capital, with the rest earmarked for new and existing projects.

In an IPO note, Rakuten Research put out a “buy” call on Jati Tinggi with a fair value of 38 sen, which is a slight discount to its listed peers on Bursa Malaysia due to its smaller market capitalisation.

“Premised on its existing sizeable order book, potential to be a key solutions provider in the National Energy Transition Roadmap and gradual evolution into a main contractor, we expect Jati Tinggi to register core net earnings of RM5.6mil and RM10.8ml for this financial years 2023 (FY23) and FY24, respectively,” the research house noted.

Rakuten added that Jati Tinggi is gradually evolving from being a subcontractor into a main contractor, which will allow it to tender for larger projects and improve its profitability.