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Titijaya and Bunseng propose listing plans

KUALA LUMPUR: Property developer Titijaya Bhd and hardware marketing outfit Bunseng Holdings Bhd are the latest two companies that have proposed to list on Bursa Malaysia.

The Securities Commission had put up the companies' listing prospectus exposure on Monday, Jan 10, with the last day of exposure on Jan 31.

Titijaya, a property developer with projects in Subang and Klang, has planned to issue 45.3 million new shares, representing 25% of its enlarged share capital, for its initial public offering (IPO).

Out of the total new shares issued, 5.52% will be offered to the public while 50% is allocated for bumiputera investors. Another 16.7% will be offered to investors via private placement with the remaining 2.76% reserved for eligible employees and directors of the company.

Other than the issue of new shares, Titijaya's promoter is also placing out 18.11 million existing shares to bumiputera investors via an offer for sale.

The lead arranger for Titijaya's IPO is RHB Investment Bank Bhd.

The pricing of the IPO and the amount to be raised have not been finalised. But according to Titijaya, 25% of the proceeds from the IPO would be for acquiring landbank, while the remaining would be used to repay bank borrowings and as working capital.

In FY2010 ended June 30, Titijaya's net profit rose 18.2% year-on-year (y-o-y) to RM16 million, despite a 32.6% drop in revenue to RM101.8 million. Higher earnings were achieved despite a fall in revenue due to the company's shift to develop high-end properties that commands higher margins and premium pricing.

Titijaya is known for its RM125 million Subang SOHO commercial development project.

Currently, it is undertaking larger-scale projects such as the Subang Park homes development at SS19, Subang Jaya, comprising high-end, low rise and low density condominiums with an estimated gross development value (GDV) of RM398 million and the first phase of the Seri Alam Industrial Park in Klang with an estimated GDV of RM132 million.

Bunseng, which is involved in the marketing of hardware products, has proposed to issue 33.3 million new shares, out of which eight million is allocated for subscription by retail investors, 20 million shares for private placements, and 5.3 million shares for eligible directors and employees. A bulk of the proceeds would be utilised to repay bank borrowings.

According to its draft IPO prospectus, Bunseng's promoter has also proposed an offer for sale of 45 million existing shares, out of which 16 million shares would be placed out to bumiputera investors and the remaining 29 million shares to other identified investors.

Bunseng's IPO is advised by CIMB Investment Bank Bhd.

In FY2010 ended June 30, Bunseng's net profit rose 21.8% y-o-y to RM20.7 million on the back of higher revenue.

The company said it had been able to maintain a gross profit margin ranging from 23% to 26% for FY2008, FY2009 and FY2010. It added that its strategy of purchasing hardware product supplies directly from local and overseas manufacturers, instead of through middlemen, had lowered its purchase cost and hence the good margins from sales.
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