From left: Geohan Corp Bhd non-independent executive director Lee Jie Min, Geohan non-independent executive director Ir. Oh Chin Wah, Geohan managing director Lee Kim Seng, Geohan independent non-executive chairman Datuk Ir. Dr. Mohd Asbi Othman, Alliance Bank Malaysia Bhd group chief corporate & institutional banking officer Teoh Chu Lin, Alliance Islamic Bank Bhd head of corporate finance Tee Kok Wah and Alliance Islamic Bank head of coverage & origination Lim Shueh Li.
KUALA LUMPUR: Geohan Corp Bhd intends to stay ahead of the competition by investing significantly into its machineries, as the group continues making headway in the domestic foundation and geotechnical engineering sector.
Geohan is also looking into carving a more sustained path in Singapore, which at the moment makes up less than 10% of its group revenue.
Speaking at the launch of the company’s initial public offering (IPO) prospectus here yesterday, the group’s managing director Lee Kim Seng reported that from the targeted RM72.6mil to be raised, RM40mil or 55.1% of the total proceeds will be allocated to purchase 17 new machines including four boring rigs, while RM25.6mil or 35.3% will be utilised as working capital.
Geohan, through its subsidiaries, is principally involved in the provision of foundation and geotechnical services, as well as other related services, for a range of construction projects comprising residential, mixed, commercial, industrial and infrastructure development.
The company is slated to list on Bursa Malaysia’s Main Market on Dec 5, the seventh new listing on the primary board in 2025, through the issuance of 132 million new ordinary shares at 55 sen per share, representing 30% of its enlarged issued share capital of approximately RM204.25mil comprising 440 million shares.
Based on the enlarged number of issued shares and its IPO price per share, Geohan’s market capitalisation works out to RM242mil upon listing.
Lee highlighted that the group’s first major breakthrough came when it secured the Genting Highland’s First World Hotel project in 1998.
“This opened up opportunities for us and over the years, we continued to take on many other projects up in Genting Highlands, including Sky Avenue, Genting SkyWorlds Theme Park, Genting Premium Outlet and Genting cable cars,” he added.
Lee said Geohan is looking to expand its presence across the Klang Valley as well as throughout Malaysia and Singapore, while continuing to innovate its piling solutions.
Holding a current order book of RM390.4mil, Geohan executive director Oh Chin Wah believes that the group’s machinery fleet, including a young fleet of German brand Bauer boring machines with an average age of six years, as well as the company’s established skill set and track record, will give it an edge over competitors in the market, including in Singapore.
While forecasting that 65% of the company’s revenue this year – anticipated to be approximately RM203.5mil – would be contributed by the residential business segment, Oh said it is possible the infrastructure segment could see an increase in share of the turnover pie, from an expected 11.2% this year to 15% in years to come.
“This is because the government has invested heavily in infrastructure development in the country, such as the Mutiara Line LRT (Light Rail Transit), the Rapid Transit Link and a number of major highway projects.
“However, our primary focus will still be on the residential business, judging from the demand we are receiving in the market especially from the northern region which has been rather significant,” he said.
Oh added that Geohan is currently aiming to clinch jobs related to the Mutiata LRT line, before saying that contributing to infrastructure projects in Penang will help the group in setting up a strong foothold in the region.
Elaborating on the group’s strategy for further expansion in Singapore, Oh explained that equipment and skills set aside, the company would be embarking on infrastructure projects down south from a relatively smaller scale at this stage.
He said Geohan is continuing to participate in tenders for projects in the city-state, although it does already have a foot in door.
Geohan’s IPO prospectus noted that between 2009 and 2011, it had secured 13 letters of awards for projects in Singapore which had been successfully completed, including the modification of the Jurong East Mass Rapid Transit (MRT) Station.
The group’s ongoing projects include Ativo Annexe, a mixed development in Kuala Lumpur; Causewayz Square and Astaka Arden Residence in Johor; Veridian Residence in Selangor; Blossom Suites and Penang Hill Cable Car in Penang; and ParkCity Tower in Kuala Lumpur.
The existing order book is expected to provide revenue visibility for at least the next two financial years.
Despite emphasising that the group will stay within the familiar markets of Malaysia and Singapore for the foreseeable future, Oh said Geohan is prioritising growth, having seen revenue recording a compounded annual growth rate of close to 38% in the last two financial years.
“This is why we are raising funds to purchase machinery, to improve our credibility and visibility which in turn will help us better in tender processes, especially in Singapore.
“We hope this would foster more confidence in the domestic market as well,” he said.
Geohan is targeting a dividend payout ratio of 25% of profit after tax and minority interests.
