by FARA AISYAH/ pic by RAZAK GHAZALI
IPOS are giving premium returns to shareholders. TCS Group Holdings Bhd, the third company to go public on the local bourse since Malaysia’s Movement Control Order began in March, debuted on the ACE Market yesterday at a 154.35% premium over its offer price.
Shares of the construction firm opened at 58.5 sen yesterday, 35.5 sen higher than its reference price of 23 sen. The stock closed 22 sen stronger at 45 sen.
TCS’ IPO came a day after oil and gas firm Ocean Vantage Holdings Bhd — also listed on the ACE Market — closed its maiden trading day at 53 sen, 103.8% or 27 sen over its offer price of 26 sen.
Reservoir Link Energy Bhd’s IPO on July 15 closed at a 25.6% or 11 sen premium to its offer price of 41 sen.
TCS raised RM20.7 million from its listing, of which RM13 million will be used to acquire new machinery and equipment. Another RM4.2 million will be utilised for the company’s working capital to partly finance existing and future projects, while the remaining RM3.5 million will be used to defray listing expenses.
“We intend to strengthen our presence in the building construction sector by participating in tenders for residential and commercial high-rise buildings and purpose-built projects,” TCS group MD Datuk Tee Chai Seng (picture; left) said at the listing ceremony yesterday.
“We also aim to expand our infrastructure construction services to include major roads, highways and bridges, and form a new project team for this expansion,” he added.
The listing exercise entailed the issuance of up to 90 million new ordinary shares and an offer for sale of up to 18 million existing shares. It was oversubscribed by 33.39 times.
As at May 31, 2020, TCS’ tender book stood at RM2.13 billion comprising 10 projects — mainly highrise residential projects and landed commercial developments.
Moving forward, the group intends to bid for infrastructure works particularly in Sarawak, as the state has been allocated a huge budget for infrastructure projects.
It will focus on local projects in both the private and public sectors presently and has no intention to bid for international tenders, Tee said.
The firm’s orderbook stood at RM463.81 million as at April 30, 2020. Its ongoing construction works include Putrajaya Sentral, Hermington and Tropicana Urban Homes projects.
It posted a net profit of RM5.07 million and revenue of RM62.69 million for the first quarter ended March 31, 2020, helped by the residential segment.