Infrastructure utilities engineering company Jati Tinggi Group Bhd marked its entry onto the ACE Market of Bursa Malaysia with a strong debut, opening at 30.5 sen, a 13% premium over its initial public offering (IPO) price of 27 sen per share. The trading stock exhibited notable momentum, rising further to 32 sen, representing an 18.52% increase by 10:40 am. It became the most actively traded counter on Bursa Malaysia, with 121.82 million shares changing hands.
In its IPO note, Rakuten Trade issued a “buy” call on Jati Tinggi, assigning a fair value of 38 sen. This valuation, while a slight discount to its listed peers on Bursa Malaysia, reflects its smaller market capitalization. Rakuten Trade emphasized Jati Tinggi’s substantial order book, its potential as a key solution provider in the National Energy Transition Roadmap (NETR), and its strategic evolution from a subcontractor to a main contractor.
With a focus on Jati Tinggi’s existing sizable order book and its role in the NETR, Rakuten Trade anticipates core net earnings of RM5.6 million and RM10.8 million for FY23 and FY24, respectively. The company’s gradual transition into a leading contractor is a positive move that positions it to tender for larger projects, potentially enhancing profitability.
From the IPO, Jati Tinggi raised RM18.04 million, allocating RM7 million to repay bank borrowings and RM7.34 million for general working capital earmarked for new and existing prospects. Additionally, RM200,000 will be utilized to purchase winch machines to support business expansion, while RM3.5 million will cover listing expenses.
Expressing gratitude for the collaborative effort involved in reaching the listing milestone, Datuk Mohd Aminuddin Mohd Amin, the independent non-executive chairman, said, “The journey to this listing has been a collaborative effort, driven by the hard work and dedication of our team.”
TA Securities Holdings Bhd was pivotal in Jati Tinggi’s IPO, serving as the principal adviser, sponsor, underwriter, and placement agent. The market response and robust debut highlight investor confidence in Jati Tinggi’s growth potential and strategic positioning in the infrastructure and engineering sector.
