At mid-day break, the stock had seen 317.7 million units traded, making it the most active counter on the bourse today. It was trading 18.2% higher at 39 sen.
The IPO, which was oversubscribed by 18.38 times, entails an offering of 240.8 million shares comprising a public issue of 170 million new shares and an offer for sale of 70.8 million existing shares.
Of the RM50.6 million raised from the IPO, RM33.5 million will be used to grow its working capital for their operations while RM7.5 million will be used for the acquisition of a new head office in Shah Alam. A sum of RM4.3 million is for the estimated listed expenses.
Vestland, founded by Liew Foo Heen and Wong Sai Kit, started out as a conventional building firm. It has since transitioned its competencies towards the design and build (D&B) of private developments, industrial buildings and government projects.
Today the company is a certified G7 grade construction firm as per the Construction Industry Development Board, and currently has eight ongoing D&B projects valued at RM653.6 million, contributing 65.8% of revenue for FY22.
Managing director Liew said the company would continue to leverage its core competencies on the construction front, maintaining focus on D&B projects as the company’s primary revenue driver.
Research house Rakuten Trade, placed a “buy” call on Vestland’s shares with a target price of 43 sen based on 12x price-earnings ratio, the average price earnings of its small capitalisation peers listed on Bursa Malaysia.
Its research head, Kenny Yee, expects a significant jump in the D&B revenue figures for FY2023.
“With an active tender book of RM2 billion and the company looking to finalise a number of new projects within the Klang Valley, we are expecting revenue to leap in FY2023,” he said in a note today.
Over the past 11 years, Vestland has completed 35 projects with a total value of RM1.1 billion. It possesses solid relationships with private developers such as Armani Group and Binastra, Rakuten said.
Vestland had posted a net profit of RM17.6 million for the first nine months of FY2022 on the back of RM211.4 million revenue, translating to a net margin of 8%.
Yesterday, the company – through its wholly-owned unit Vestland Resources Sdn Bhd – was awarded a RM63.15 million contract by Rimbun Merdu Sdn Bhd to undertake building works for a block of apartments and its supporting facilities in Kuala Lumpur.