GDB Holdings

KUALA LUMPUR (March 28): Shares in GDB Holdings Bhd made a positive debut on the ACE Market of Bursa Malaysia yesterday, opening one sen or 2.86% higher at 36 sen from their offer price of 35 sen.

However, the stock failed to maintain the initial positive momentum and eventually closed at 32.5 sen, down 2.5 sen or 7.14%, bringing a market capitalisation of RM203.1 million. A total of 42.33 million shares changed hands, making it the sixth most actively traded stock on Bursa.

Speaking at a press conference here yesterday, its managing director Cheah Ham Cheia said the construction services firm is optimistic about its prospects on the back of a healthy order book of RM854.9 million as at Feb 6, which will keep it busy until 2019.

Its current tender book stands at over RM1 billion, consisting of construction works for high-rise serviced apartments, a hotel and other commercial properties in the Klang Valley.

“Based on the past record, the success rate for our tenders is about 15% to 20%,” said Cheah.

Out of its total order book, Cheah said GDB expects about RM400 million will be recognised in the current financial year ending Dec 31, 2018 (FY18), and another RM440 million in FY19.

GDB reported a record net profit of RM22.5 million for FY17, up 39.9% from RM16.1 million in the previous year, on the back of higher revenue and enhanced efficiency. Its revenue rose 7.2% to RM296.8 million in FY17, from RM276.9 million in FY16.

GDB raised RM43.8 million from its initial public offering, of which RM24.7 million is for capital expenditure, while RM15.6 million is for working capital and the remaining RM3.5 million will be used for listing expenses.

Among its ongoing projects are Westside III in Desa ParkCity, Etiqa Office Tower in Jalan Bangsar, Aira Residence in Damansara Heights and Menara Hap Seng 3 within the Kuala Lumpur City Centre.

Rakuten Trade Sdn Bhd said GDB’s net profit margin remains commendable at 7%, which is higher than its peers, while earnings per share is expected to continue to grow by double digits of 20% in FY18 and FY19.

The research firm has initiated a “buy” call on GDB, with a target price of 45 sen.

This article first appeared in The Edge Financial Daily, on March 28, 2018.

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