KTI Landmark to raise RM48m from ACE Market IPO

• “The allocation of proceeds for our working capital requirements will reduce our dependency on external financing, and allow us to undertake more projects concurrently.”

KUALA LUMPUR (May 21): KTI Landmark Bhd expects to raise RM48 million under its listing exercise on the ACE Market of Bursa Malaysia.

In a statement on Tuesday, the Sabah-based integrated property developer said it plans to use RM20.7 million (43.1%) of the proceeds raised from the initial public offering (IPO) to supplement its general working capital requirements for The Logg project, which include construction cost (building and infrastructure cost), consultants’ and professional fees, and local authority fees for the ongoing projects.

KTI group managing director and chief executive officer Dr Gordon Loke said The Logg is the company’s first mixed development project, and is also its first joint development project with Lembaga Pembangunan Perumahan dan Bandar (LPPB), the state agency in Sabah.

“The landmark property with an estimated gross development value (GDV) of about RM1 billion will be developed on a five-acre (2.02-hectare) land in Luyang, Sabah by December 2025, comprising two blocks of condominiums, one block of apartment, a four-star hotel, and a commercial building.

“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.

Loke said a further RM18 million (37.5%) of the proceeds will be used to partly fund the acquisition of land bank in Sabah, within the vicinity of its existing land bank for future projects in Alamesra, Kota Kinabalu.

KTI on Jan 9, 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 cash.

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.

To date, KTI has delivered projects with a total GDV of RM1.2 billion, of which RM1 billion came from the provision of design-and-build construction projects, with the remaining RM207.6 million from its own property development projects.

Currently, it has a total of RM2.2 billion GDV in ongoing and upcoming projects across Kota Kinabalu, Tuaran, Sandakan and Papar in Sabah, where 30% are projects awarded by the LPPB, while the remaining are joint ventures 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 Dec 31, 2023 (FY2023), KTI’s net profit rose 31.9% to RM13.8 million, from RM10.5 million a year ago, on higher gross profit.

FY2023 revenue increased 6.5% to RM120.2 million, from RM112.9 million for FY2022.

During the period under review, the company’s gross profit expanded to RM35.6 million, translating into a gross profit margin of 29.6%, versus 27.3% for FY2022, due to a mix of contributions from projects with higher gross profit margins.

The net margin for FY2023 also improved to 11.5%, from 9.3% a year ago.

Under the listing exercise, KTI is issuing 160 million new shares, representing 20% of its enlarged share capital, and an offer for sale of 45 million existing shares (5.6% of the enlarged share capital), at an issue price of 30 sen per share.

Of the 160 million new shares, 40 million new shares will be available to the Malaysian public via balloting, followed by another 40 million for the company's eligible directors, employees and persons who have contributed to the success of the 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.

The IPO is open for subscription from Tuesday to June 4.

KTI is scheduled to list on the ACE Market on June 19.

M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.

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