By SULHI KHALID / Graphic By TMR
INDUSTRIAL park developer AME Elite Consortium Bhd will benefit from trade diversion activities as companies shift their manufacturing bases to avoid the negative effects of the US-China trade tensions.
Countries in the Asean region, especially Vietnam and Malaysia, are prime targets for multinational companies looking for new locations, Inter-Pacific Research Sdn Bhd said.
“Malaysia in particular looks to be placed well geographically, commanding ports in Penang, Klang and Johor,” it wrote in a note yesterday.
The research house has a target price of RM1.40 on AME, based on a sum-of-parts valuation which represents a potential upside of 7.7%. AME is set to debut on the Main Market of Bursa Malaysia on Oct 14.
Its initial public offering (IPO) entails a public issue of 85.4 million new shares along with an offer for sale of 42.7 million existing shares, at an issue price of RM1.30 per share.
“Our forecast excludes new projects the group may acquire that are still in the midst of discussion with land- owners, solid details of which have yet to be unveiled,” Inter-Pacific said.
Under the listing exercise, AME aims to raise RM166 million, of which RM111 million will be used for business expansion, while the remaining RM55.5 million will go to the selling shareholders via an offer for sale.
From the RM111.1 million business expansion allocations, RM69.1 million will be for future industrial property development and investment projects.
A further RM23 million will go towards working capital for the development known as i-Park @ Senai Airport City in Johor.
About RM9 million will be used to complete the expansion of the group’s precast concrete fabrication capacity, and the remaining RM10 million to defray listing expenses.
CIMB Investment Bank Bhd is the principal advisor, managing underwriter, joint underwriter and joint bookrunner, while RHB Investment Bank Bhd is the joint underwriter and joint bookrunner for AME’s IPO.
AME will be the fourth company to list on the Main Market this year. Bursa Malaysia has seen a total of 24 listings for the year-to-date, including GPP Resources Bhd’s IPO on the Leading Entrepreneur Accelerator Platform (LEAP) Market expected today.
Established in 1995, AME is a construction and property group specialising in constructing customised large manufacturing plants, as well as the design-and-build and development of industrial parks.
It has four industrial parks under its belt, namely i-Park @ Southern Industrial & Logistics Clusters (SiLC), i-Park @ Indahpura (Phase 1 and 2), and SME City (by jointly-controlled entity Axis AME IP Sdn Bhd).
The group’s ongoing industrial park projects are i-Park @ Indahpura (Phase 3) and i-Park @ Senai Airport City (Phase 1 and 2), with an estimated gross domestic value of RM546 million and RM717 million respectively.