Property News

Wawasan Dengkil slips after flat open on ACE Market debut

“The expansion initiatives come at an opportune time, as the construction industry stands to benefit from government-led initiatives and spending, particularly in infrastructure development.”

KUALA LUMPUR (March 25): Construction services firm Wawasan Dengkil Holdings Bhd (KL:DENGKIL) fell nearly immediately below its initial public offering (IPO) price in its ACE Market trading debut on Tuesday.

Wawasan Dengkil opened at 25 sen, unchanged versus its reference price. Opening volume was 2.89 million shares. However, the stock began slipping thereon, hitting 23.5 sen at 9.10am after more than 11 million shares changed hands. Eventually, it closed at 23 sen today. 

The flop extended the recent streak of stocks that plunged on their first trading day, and Wawasan Dengkil is set to be the fourth such disappointing debut this month.

“With fresh capital from our IPO, we are ready to accelerate our growth and seize new opportunities,” executive director Lim Soon Yik said at Wawasan Dengkil’s listing ceremony on Tuesday.

Applications for its shares came in 17 times above the total set aside for public retail investors during the initial share sale. Shares allocated for eligible persons were fully subscribed, while private placement for select investors were all taken up.

The company raised RM27.01 million, of which more than one-third of the proceeds have been earmarked for project working capital. The company is also setting aside 28% for the purchase of excavators, a mobile crane, and dump trucks.

“The expansion initiatives come at an opportune time, as the construction industry stands to benefit from government-led initiatives and spending, particularly in infrastructure development,” said Lim.

The company has 14 ongoing projects with unbilled orders worth RM378.14 million, and is bidding for projects worth RM1.3 billion. It is involved in major projects, including the third phase of the Light Rail Transit.

“As earthworks are typically needed in the initial phase of building and infrastructure construction, we are well positioned to capitalise on these growth prospects,” Lim added.

Wawasan Dengkil will use 5% of the money raised for general working capital, repayment of bank borrowings, office renovation, and to defray listing expenses.

Meanwhile, a sum of RM13.5 million from the offer for sale of existing shares will accrue entirely to selling shareholders Lim and his family.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO, while Eco Asia Capital Advisory is the financial adviser.

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Source: EdgeProp.my