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Haily to grow industrial building business

Haily to grow industrial building business

22 Jul 2021

The ACE Market debutant will continue focusing on its core competency in building construction in Johor and extending its reach to other districts

Ace Market debutant Haily Group Bhd plans to expand into industrial building construction to tap into opportunities rising from the economic developments in Johor.

Its independent and non-executive chairman Mohd Jaffar Awang (Ismail) said the group has completed six industrial building construction projects with a total of 68 units of factories in Johor Baru and Kulai districts.

“We will also use part of the proceeds raised from our IPO exercise to purchase additional construction machinery and equipment, mainly to facilitate better scheduling of our construction work when the projects require concurrent usage and in anticipation of future growth,” Mohd Jaffar said after the virtual listing ceremony yesterday.

The building construction group debuted on the ACE Market of Bursa Malaysia Securities Bhd at 16.2% or 11 sen premium over its issue price of 68 sen.

The shares tested a high of 82 sen and a low of 71 sen in intraday trade to close its maiden trading day at 74 sen.

Haily raised RM20.4 million via 30 million new public shares issued at 68 sen.

The group plans to use RM4.2 million (20.6%) of the gross proceeds for the purchase of construction machinery, equipment and new contract management and accounting software and office equipment.

RM6 million (29.4%) will go to working capital for its construction projects and RM7 million (34.3%) will be allocated for repayment of bank borrowings.

Mohd Jaffar said the company would continue focusing on its core competency in building construction in Johor and extending its reach to other districts.

He said Haily would leverage its capabilities as a Grade G7 contractor, whereby the group could bid and carry out any size of building construction projects irrespective of the contract value.

“We have ongoing projects that can sustain us at least until 2023. Currently, Haily has 18 building construction projects, as well as two civil engineering-related construction projects,” he said.

As of June 10, 2021, the group’s total secured contract value stood at RM460.04 million, while unbilled contract value reached RM249.58 million.

Mohd Jaffar said Haily had completed 65 building construction projects with a total contract value of RM1.29 billion since 2008.

Haily CEO and ED Yoong Woei Yeh said the group has started to get involved in the industrialised building system (IBS) in its construction works in line with the Fourth Industrial Revolution (IR4.0).

“A few years back, we started using the aluminium system formwork as a part of IBS, which actually depends more on the project and the repetition of usage based on the project,” Yoong said.

Haily aims to distribute dividends of at least 30% of its annual profits attributable to its shareholders upon completion of the listing. However, it is not a legally binding obligation or guaranteed commitment to the shareholders, the company said in a statement.

The group registered a net profit and revenue of RM2.8 million and RM43.3 million respectively for its first quarter ended March 31, 2021.

The board declared a first interim single tier dividend of 1.68 sen per ordinary share, in respect of the financial year ending Dec 31, 2021.

Analysts previously wrote that the catalysts for the group include low-interest rates and favourable lending policies, availability of loans to fund construction activities, and government initiatives such as transformation programmes and affordable housing schemes. Source: The Malaysian Reserve

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