Signature Alliance Debuts 8% Higher

BusinessToday

05-06-2025

From left: Saw Gee Kai, Group Chief Financial Officer of SAG; Dato' Boey Chin Gan, Independent Director of SAG; Tan Poh Cheok, Independent Director of SAG; Lim Sook Yee, Independent Director of SAG; Melvin Ng, Promoter and CEO for Central Region, SAG; Mario Foo, Executive Director/CEO – Northern Region of SAG; Darren Chang, Executive Director/Group CEO of SAG; Chiau Haw Choon, Promoter of SAG; Datuk Wan Ahmad Satria Wan Hussein, Chairman of SAG; Datuk Bill Tan, Managing Director of M & A Equity Holdings Berhad; Datuk Seri Chiau Beng Teik, Promoter of SAG; Michael Lim, Group Chief Financial Officer of Chin Hin Group Berhad; Lau Kock Sang, Director of SAG; and Gary Ting, Head of Corporate Finance at M & A Securities Sdn Bhd.
Signature Alliance Group Bhd (SAG) made a firm debut on the ACE Market of Bursa Malaysia this morning, opening at 68 sen and recording an 8.87% gain to 67.5 sen as of 9.03am.
The construction and interior fit-out firm saw 256.9 million shares changing hands, making it one of the most actively traded counters at the opening bell. It hit a high of 69.5 sen and a low of 67 sen in early trade, with buy and sell volumes remaining strong.
SAG's listing comes on the back of a fully subscribed IPO, with its public portion oversubscribed by 1.12 times. The offering raised RM161.2 million through the issuance of 260 million new shares at 62 sen apiece, giving the company a market capitalisation of RM620 million at listing.
Darren Chang, Executive Director/Group Chief Executive Officer of SAG, said the company is confident of securing between 15% and 20% of its RM1.1 billion tender book by the end of 2025.
'The tenders primarily comprise commercial and industrial property projects valued at RM1.1 billion as at April 16, 2025. Based on our historical average tender success rate of around 15% to 20%, we are optimistic about meeting our target,' he added.
Speaking to reporters after SAG's Listing Ceremony, Mr Chang noted that the Company's earnings visibility for the financial year ended 31 December 2025 ('FY25') and FY26 will be supported by an unbilled order book of RM388.6 million as at 16 April 2025, in addition to anticipated contract wins.
As at April 16, 2025, SAG has 69 ongoing projects with a total contract value of RM902.4 million.
'Our current ongoing projects of RM902.4 million, of which RM388.6 million unbilled, clearly reflects market demand for our interior fitting-out services and provides earnings visibility for the next one to two financial years,' Mr Chang further added.
For the first quarter ended 31 March 2025 ('1QFY25'), SAG reported a net profit of RM15.8 million on the back of revenue of RM147.2 million. The strong performance was driven by interior-fitting out works for two major projects – a commercial office property in Bandar Baru Sri Petaling and a commercial hotel property in Tun Razak Exchange, accounting for 38.9% and 11.9% of the revenue respectively.
The company posted a gross profit ('GP') of RM29.1 million during the quarter, with GP margin of 19.8%.
No comparative figures were available as it was the first interim financial report released by the Company in relation to its financial results, in compliance with the listing requirements.
For FY24, SAG's net profit surged 290.4% to RM40.6 million, from RM10.4 million in FY23. This was attributed to higher GP and net gain on impairment of financial assets and contract assets. Revenue for FY24 rose 122.6% to RM386.0 million, from RM173.4 million in FY23.
Under the listing exercise, SAG raised RM161.2 million from its Public Issue of 260 million new shares at RM0.62 per share. No existing shares were offered for sale.
Of the total proceeds, RM88.0 million (54.6%) will be used to establish a new corporate office as its new headquarters and a production facility to centralise its production activities in Selangor.
A further RM30.1 million (18.7%) of the proceeds will be used for working capital purposes to meet the working capital requirements for its interior fitting-out projects.
The remainder of the proceeds will be used to repay bank borrowings amounting to RM20.0 million (12.4%); RM12.0 million (7.4%) to expand and establish branch offices in Pulau Pinang and Johor to strengthen the Company's presence regionally in Peninsular Malaysia; RM4.0 million (2.5%) to acquire additional machinery and equipment for the new production facility in Selangor to increase automation and further strengthening its project delivery capabilities while the remaining RM7.1 million (4.4%) to defray the estimated listing expenses.
Following its listing, SAG is expected to have a market capitalisation of RM620 million, based on an enlarged share capital of 1.0 billion shares.
Related