KUALA LUMPUR: Sabah-based major road infrastructure construction player, Azam Jaya Berhad (“Azam Jaya”), has successfully launched its prospectus today as part of its initial public offering (“IPO”) exercise on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
Azam Jaya, through its subsidiaries (collectively, the “Group”), specialises in the construction of large-scale road infrastructure in Sabah, including roads, highways, bridges, flyovers, and tunnels. With over 30 years of experience in the industry, the Group has a proven track record, having successfully completed over 50 construction projects in the region.
Datuk Lo Vun Che @ Jessica, Executive Director of Azam Jaya, stated, “We are proud to have contributed to notable road infrastructure developments in Sabah, such as the longest pre-stressed vehicular bridge across Sungai Sitompok and Sabah’s first vehicular tunnel at Sepanggar, Kota Kinabalu. Currently, we are engaged in nine (9) ongoing projects, including 4 work packages of the Pan Borneo Highway, bringing our total unbilled contract value to RM1.45 billion, providing earnings visibility up to 2028.”
“With the launch of our prospectus, Azam Jaya is now one step closer to becoming a public listed company on the Main Market of Bursa Securities. This IPO is a pivotal step in our long-term growth strategy, enabling us to enhance our construction capabilities and capacity to undertake more large-scale projects. We aim to further elevating the construction standards in Sabah, introducing innovative techniques and high-quality engineering to meet the growing demands of the region.”
According to the Independent Market Research report by Infobusiness Research & Consulting Sdn Bhd, Sabah’s construction industry is set for growth in line with the Mid-Term Review of the Twelfth Malaysia Plan 2021-2025. This growth is a promising opportunity for Azam Jaya, particularly in regions where infrastructure development, such as roads and bridges, is poised to accelerate. A key component of this growth is the Pan Borneo Highway, where Azam Jaya plays a crucial role in linking Sabah and Sarawak, driving further modernisation and regional connectivity.
En. Anuar Bin Omar, Head of Capital Markets / Corporate Finance at Inter-Pacific Securities Sdn Bhd commented, “The upcoming IPO will elevate Azam Jaya’s reputation among existing and potential customers and attract a broader talent pool. By leveraging its extensive industry experience and strong leadership of its management team, the Group is well-positioned to solidify its position as a key infrastructure player and seize new opportunities in the growing construction industry.”
From the IPO proceeds of RM61.5 million, the Group has allocated RM8.0 million (13.0%) to boost construction capabilities and operational efficiencies by acquiring new machinery and equipment as well as technological upgrades. In addition, RM28.4 million (46.2%) is allocated for working capital purposes, RM20.0 million (32.5%) is earmarked for repayment of bank borrowings, and RM5.1 million (8.2%) will be used to defray listing expenses.
On financial performance, the Group’s revenue grew from RM231.5 million in the financial year ended 31 December 2021 (“FYE 2021”) to RM280.8 million in the financial year ended 31 December 2023 (“FYE 2023”), representing a 2-year compound annual growth rate (“CAGR”) of 10.1%.
In terms of dividend policy, Azam Jaya targets to distribute at least 30% of its net profit attributable to shareholders.
Following the prospectus launch, applications for the public issue are open from today and will be closed on 24 October 2024 at 5.00 pm. The Group is scheduled to be listed on the Main Market of Bursa Securities on 11 November 2024.
Inter-Pacific Securities Sdn Bhd is the Principal Adviser, Sole Underwriter and Sole Placement Agent for the IPO exercise.
