KUALA LUMPUR: Gabungan AQRS Bhd has no immediate plan to do share placement to address the low liquidity of its stock, said its CEO Alvin Ng.
Currently, the company has only 9.22% of its issued share capital traded on the open market with a capitalisation value of RM394.6 million.
However, its executive director Paul Ow commented that the low liquidity “is not a cause for much concern”.
“We are still in the growing phase and the market has been generally quiet, but definitely with more business activities, we hope that people will also take more notice of our shares,” said Ow.
The company’s single largest shareholder Ng Chun Seong holds a 20.27% equity stake, followed by Shahrum Niza Yahya who holds a 14.7% stake. The CEO is also among the substantial shareholders, owning an 11.04% stake.
Gabungan’s share price has been on an upward trend of late. The stock rebounded from the low of RM1.04 last month to close at RM1.10 yesterday.
However, the counter is still trading below its IPO price of RM1.18. In fact, its share price has fallen since its debut on the Main Market last July.
Speaking at a fund managers briefing yesterday, Ng said Gabungan was looking out for merger and acquisition (M&A) partners to beef up its mechanical and engineering expertise in order to enhance its income stream.
According to him, the company is in talks with potential partners for a M&A exercise to set up a mechanical and engineering (M&E) division by the middle of the year.
“At the moment, our M&E is subcontracted out and it makes up roughly 15% to 20% of our construction turnover, which would be in the tune of RM50 million to RM60 million, which is why we want to recapture that margin for ourselves,” he said.
Meanwhile, Ng said Gabungan is planning to launch an industrialised building systems (IBS) manufacturing project in Sabah.
IBS is a new construction technique where components are manufactured in a controlled environment and transported, positioned and assembled into construction works.
There are currently five main IBS groups in Malaysia — pre-cast concrete framing, panel and box systems, formwork systems, steel framing systems, prefabricated timber framing systems and block work systems.
Some construction projects that use the IBS technique are the Customs, Immigration and Quarantine Complex in Johor, the KL International Airport and KL Sentral.
As for its property development division, Gabungan has property projects worth RM391.1 million in its pipeline to be launched this year. However, Ng said the company’s primary focus would remain in construction.
Gabungan also has a slew of ongoing projects that have been lined up to be delivered up to 2016, including Package C1 of LDP extensions, the Ampang LRT carpark and building as well as Package V1 (Sungai Buloh to Kota Damansara stations) of the MRT project.
For its nine months ended Sept 30, Gabungan recorded a net profit of RM18.6 million on revenue of RM254.3 million.
The company has not declared any dividend so far, but Ng said Gabungan would set aside up to 25% of its earnings.
Gabungan currently has property projects that have a gross development value of RM1.4 billion, and a construction order book of RM1.2 billion. It is in a net cash position of RM27 million.
This article first appeared in The Edge Financial Daily, on February 7, 2013.