Azam Jaya eyes growth beyond home base, names Sarawak and Kalimantan as potential markets

• Jessica said venturing into the peninsular is not on the table due to a saturated market, which is currently dominated by “big players”.

KUALA LUMPUR (Nov 11): Construction firm Azam Jaya Bhd (KL:AZAMJAYA), which debuted on the Main Market of Bursa Malaysia on Monday, said it is eyeing growth beyond its home base, naming Sarawak and Kalimantan as potential markets.

Azam Jaya executive director Datuk Jessica Lo Vun Che said the company expects Sabah to remain as its core market, adding that “there is a lot more to do”.

“I think because there’s a lot more to do in Sabah itself, not just the Pan Borneo Highways, it’s also the rural road packages and all that.

“But I think we can go beyond that, especially down to Kalimantan and maybe to the neighbouring countries and all that, or even to international,” she said during a press conference following Azam Jaya’s listing ceremony on the Main Market of Bursa Malaysia on Monday.

Meanwhile, Jessica said venturing into the peninsular is not on the table due to a saturated market, which is currently dominated by “big players”.

Meanwhile, Azam Jaya alternate director and head of sustainability and innovation Datuk Johannes Lo Chaw Jack said the company will consider the Sarawak market if the “margins are attractive”.

In addition, Azam Jaya said the group will tender for additional phases of the construction of the RM29 billion Pan Borneo Highway project.  

Azam Jaya currently boasts a RM1.45 billion unbilled order book consisting of nine active projects, including four key packages for the Pan Borneo Highway. 

The combined unbilled value of these highway projects stands at RM1.34 billion, based on Azam Jaya’s statement.  

“We are currently awaiting more details from the government on the tender process (for the other packages of Pan Borneo). While the full scope is yet to be determined, listing on the Main Market prepares us for this stage, enabling us to secure the necessary resources and capital,” Johannes said.  

“We believe we have built the confidence of both the government and our shareholders. Our focus is now on scaling up operations and capturing a larger market share,” he added.  

For the first half of the financial year ending June 30, 2024 (1HFY2024), Azam Jaya reported a net profit of RM7.82 million, on the back of RM148.82 million in revenue, driven primarily by its construction activities and sales of ready-mixed concrete and asphalt premix.

Moving forward, the company plans to reduce its reliance on subcontractors, by expanding its fleet of construction machinery to improve its control over project timelines and quality.  

The company plans to invest RM30 million by the end of 2025 in acquiring equipment such as excavators, dump trucks, and bulldozers. Some portion of its IPO proceeds, amounting to RM6 million, will fund these purchases, with the remainder covered through internal funds and bank borrowings, Azam Jaya noted.  

Azam Jaya also plans to allocate RM2.5 million for technological upgrades, targeting better project management and error reduction. RM2 million of this investment will be financed through the IPO proceeds.

Shares in Azam Jaya surged 28% on their trading debut earlier on Monday, after opening at RM1 versus its IPO price of 78 sen per share. The stock climbed to as high as RM1.16, before dropping to RM1.04 at noon, after 54 million shares exchanged hands.

At its closing price of RM1.09 today, the company had a market capitalisation of RM545 million.

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