PETALING JAYA: QES Group Bhd
’s acquisition of two industrial office units in Singapore is expected to support the group’s expansion while easing space constraints, according to Apex Securities Research.
On Tuesday, QES (Singapore) Pte Ltd (QSG), a 70%-owned subsidiary of QES (Asia-Pacific) Sdn Bhd, which is in turn an indirect subsidiary of QES, entered into a sale and purchase agreement with JVA Nir Pte Ltd to acquire two freehold B1 clean- industrial office units at Space Nova, 21 New Industrial Road, Singapore.
The units, measuring 160 sq m and 154 sq m, are being acquired for about S$5.5mil (RM17.5mil).
Apex Research said the premises would provide additional operating and demonstration-room capacity for QES Group’s scientific instruments business, positioning the group ahead of anticipated product and market expansion.
“We view the acquisition positively, supported by QSG’s anticipated business growth in product and market expansion, and the need to pre-empt bottlenecks from limited physical operating space,” it said in a report.
The acquisition could also improve QES Group’s long-term operating cash flow by eliminating rental expenses once the group relocates to the premises.
And the units were strategically located and could potentially appreciate in value over time.
However, the research house said the acquisition was a “long-dated commitment” as the building is still under construction, with vacant possession expected by June 30, 2029 and legal completion by June 30, 2032.
“The acquisition will be funded 90%, or RM15.7mil, through new bank borrowings, with the remaining RM1.8mil funded through internally generated funds.
Despite the additional borrowings, Apex Research said QES Group had “ample balance sheet headroom” to fund the acquisition, with cash and fixed deposits estimated at RM142.5mil against borrowings of RM61.6mil by end-2026, giving it an estimated net cash position of about RM80.9mil.
Apex Research has trimmed its FY27 and FY28 core net profit forecasts marginally to RM34.4mil and RM43.4mil, from RM34.5mil and RM43.5mil, previously, reflecting higher finance costs arising from the acquisition, while maintaining its FY26 forecast at RM26.7mil.
It maintained a “buy” call on QES Group with an unchanged target price of 75 sen, based on a 20 times price-to-earnings ratio applied to its FY27 earnings per share of 3.75 sen.
