KTI targets RM48 million from Ace listing
Published on: Wednesday, May 22, 2024
By: Mohd Izham Bin Hashim
Hajiji (centre) with Dr Gordon (third from left) at the KTI Landmark Berhad’s IPO Prospectus Launch in conjunction with its listing on the Ace market of Bursa Malaysia Securities Berhad.
Kota Kinabalu: Sabah-based integrated property developer KTI Landmark Berhad is targeting to raise RM48 million under its listing exercise on the ACE Market of Bursa Malaysia Securities Berhad.
Its Group Managing Director and CEO Dr Gordon Loke said a sum of RM20.7 million (43.1pc) of the proceeds will be allocated for general working capital requirements for its flagship project, The Logg.
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“The allocation of proceeds for our working capital requirements will reduce our dependency on external financing and allow us to undertake more projects concurrently,” he said in a statement issued alongside the launch of the company’s prospectus,”
The groundbreaking ceremony held for the company’s inaugural prospectus launch in conjunction of its Initial Public Offering(IPO) listing on the ACE Market of Bursa Malaysia Securities Berhad was launched by Sabah Chief Minister, Datuk Seri Hajiji Noor on Tuesday.
KTI is scheduled to be listed on the ACE Market of Bursa Securities on 19 June 2024.
The Logg is the KTI’s first mixed-use development project and will comprise two blocks of condominiums, a 4-star hotel, a commercial building and a block of apartment.
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It is also the company’s first joint development project with the State Housing and Urban Development Board (LPPB)
The landmark property, with an estimated gross development value of RM1 billion, will be developed on a 5-hectare site in Luyang, Sabah by December 2025.
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According to Dr Gordon, the sum of the proceeds channelled for general working capital requirements include construction costs (building and infrastructure), consultants’ and professional feeds, and local authority fees for ongoing projects.
In his speech, Dr Gordon highlighted that the launch of the company’s prospectus was a significant achievement in celebrating the company’s 40th anniversary.
“This milestone achievement is such a great way to mark this year, to celebrate the launching of our IPO Prospectus on our 40th anniversary, ahead of becoming Malaysia’s next publicly listed company,” he said.
Dr. Gordon commended the Madani government’s ‘Look East Policy,’ which aims to develop East Malaysia, including Sabah and Sarawak, as the country’s new economic hub.
The move was followed by the Sabah state government’s proposal of a progressive economic plan to the federal government, particularly in preparation for the 13th Malaysia Plan 2026-2030.
“In 2021, Sabah’s total investments surpassed RM6 billion, and it was more than 11 billion by 2023, representing an 88 pc increase within two years.
This means more job opportunities, increased disposable income, higher business earnings and expansions of businesses, all drivers of demand for both residential and commercial properties in Sabah,” he said.
Furthermore, he noted the IPO allowed KTI to position is plans and strategies in anticipation of the impending boom of the Sabah economy.
On the proceeds, Dr Gordon noted a further RM18 million (37.5pc) will be used to partially fund the acquisition of landbank in Sabah within the vicinity of its existing landmark for future development projects in Alamesra, Kota Kinabalu,” he added.
KTI Landmark had on 9 January 2023 entered into a conditional sale and purchase agreement with Millennium Amber Sdn Bhd for the acquisition of Alamesra Lands, which is earmarked for its Ayuria Place Project in Alamesra, Kota Kinabalu for RM74 million.
The land, measuring 26.3 acres will be developed into high-rise residential properties in multiple phases until 2028, with an estimated GDV of about RM873.1 million.
The remainder of the proceeds will be used to purchase the new industrialised building system (“IBS”) production line amounting to RM2.1 million (4.5pc), RM0.4 million (0.7pc) to upgrade software and systems, RM3 million (6.3pc) to repay bank borrowings while the remaining RM3.8 million (7.9pc) for estimated listing expenses.
To date, KTI has delivered projects with a total GDV of RM1.2 billion, of which RM1billion from the provision of design and build construction projects while the remaining RM207.6 million from its own property development projects.
Currently, the company has a total of RM2.2 billion GDV on-going and upcoming projects across Kota Kinabalu, Tuaran, Sandakan and Papar, where 30pc are projects awarded by LPPB and the remaining are joint venture or its own projects to be developed until 2028.
The Company’s notable projects include among others; Taman Wawasan in Beaufort, Taman La Gloxinia in Papar, Taman Seri Lemawang in Tuaran as well as Taman Nelly, Taman Lavender and The Logg in Kota Kinabalu.
“For the financial year ended 31 December 2023 (“FY2023”), KTI’s net profit rose 31.9pc to RM13.8 million, from RM10.5 million a year ago (“FY2022”) on higher gross profit (“GP”),” he said, noting FY2023 revenue increased 6.5pc to RM120.2 million from RM112.9 million in FY2022.
During the period under review, the Company’s GP expanded to RM35.6 million, translating to a GP margin of 29.6pc, versus 27.3pc in FY2022 due to a mix of contributions from projects with higher GP margins. Net margin for FY2023 also improved to 11.5pc from 9.3pc a year ago.
Under the listing exercise, he noted KTI is issuing 160 million new shares and an offer for sale of 45 million existing shares, representing 20pc and 5.6pc of its enlarged share capital respectively, at an issue price of RM0.30 per share.
Of the 160 million new shares, Dr Gordon noted 40 million new shares will be available to the Malaysian public via balloting; 40 million new shares for its eligible Directors, employees and persons who have contributed to the success of KTI Group under pink form allocations while the remaining 80 million new shares are reserved for private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti)
As for the offer for sale portion, he said 20 million shares are reserved for private placement to Bumiputera investors approved by the Miti while the remaining 25 million shares will be allocated by way of private placement to selected investors.
“Based on the enlarged share capital of 800 million shares, KTI is expected to have a market capitalisation of RM240 million,” he said.
The IPO is open for subscription from 21 May 2024 to 4 June 2024.
A copy of the prospectus relating to this offering may be obtained from Bursa Securities’ website.
M & A Securities Sdn Bhd is the Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
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