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Titijaya’s Bursa debut unexciting compared with peers

KUALA LUMPUR: Debutant Titijaya Land Bhd did not fare as well as the last three IPOs as its shares failed to excite the investing public yesterday.

Opening at RM1.80, or 20% higher than its offer price of RM1.50, the shares reached as high as RM1.92 before ending the day at RM1.67, or 17 sen above its IPO price.

In comparison, Berjaya Auto Bhd closed at RM1.12 on its maiden trading day, higher than its IPO price of 70 sen. Caring Pharmacy Bhd and Karex Bhd also closed higher than their IPO price on their debut.

Caring closed its first day of trading 58 sen higher at RM1.83, while Karex saw a premium of 60 sen over its IPO price of RM1.85. Together with Berjaya Auto, they have been the three best IPOs this year, which so far has seen 17 companies listed.

Titijaya, a property development company, has Lembaga Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT) as its shareholders.

Titijaya raised RM122.6 million from the listing. It issued 81.7 million new ordinary shares and 49.5 million existing shares.

Of the total, 17 million were allocated to the public, six million to eligible directors, employees and persons and 34 million to approved bumiputera investors. Another 24.7 million shares were placements to selected investors.

Titijaya executive director Charmaine Lim, meanwhile, said the company views steel prices as more of a concern than cement prices as steel is a more highly priced commodity.

“It’s a market challenge that every property developer has to face. However, we have been in this business for 16 years and have undergone operations when diesel and construction material prices were at their peaks. We believe we will be able to handle and manage this challenge.”

She said Titijaya is currently focusing on developments in the Klang Valley, such as the [email protected] and H20 projects.

“Nevertheless, if there are other good opportunities, we will explore those too,” she added.

The company has allocated RM30 million from its IPO proceeds for the purchase of land.

“We’ll announce [our land purchases] once the deal is confirmed … at the moment nothing is concrete yet. Within 18 months, we will use up the proceeds for land acquisitions,” said CEO Lim Poh Yit.

The group intends to introduce more affordable housing projects to cater to the younger generation.

On whether the company will keep to its dividend payout ratio of 30%, Lim said: “As approved by our board, the dividend payout ratio is up to 30% of profit after tax.

“We do not want to give empty promises — 30% is the guidance given by us, but of course, having more is possible depending on the situation later on,” he said.


This article first appeared in The Edge Financial Daily, on November 28, 2013.

 

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