KUALA LUMPUR: Integrated industrial property solutions provider AME Elite Consortium Bhd soared in active trading upon its debut on Bursa Malaysia’s Main Market yesterday.

It  started the day at RM1.28, down two sen or 1.54% to its initial public offering (IPO) price of RM1.30, but quickly recovered to rise to RM1.59, before closing at RM1.55 — a gain of 25 sen or 19.23% to the offer price.

AME’s first-day showing is the fourth best among this year’s IPO on Bursa, behind UWC Bhd, I-Stone Group Bhd and Greatech Technology Bhd (see table). AME was also among yesterday’s top active counters with 49.75 million shares done.

Group managing director Kelvin Lee Chai expects double-digit growth for the current financial year ending March 31, 2020. For the first quarter ended June 30, 2019, AME’s net profit jumped 96% to RM13.1 million, from RM6.7 million a year earlier. Its revenue rose 60.8% to RM94.4 million from RM58.7 million previously.

AME said the strong results were due to higher demand for its industrial properties resulting from Malaysia’s economic growth, investments in the manufacturing sector and the ongoing US-China trade tensions.

Speaking to reporters at the listing ceremony yesterday, Lee said he sees that a rising foreign direct investment into Malaysia has helped boost demand for industrial properties.

Further, he said the group is expected to benefit from plants relocating or companies’ global expansion arising from the US-China trade spat.

Also, with the group’s strong construction order book of over RM300 million, Lee is confident this will provide AME with earnings visibility for 18 months.

Under the listing, AME will raise RM166.6 million, of which RM111.1 million will be for business expansion purposes, and the remaining RM55.5 million for the selling shareholders via an offer-for-sale mechanism.

AME said of the total proceeds raised for business expansion, RM69.1 million will be for future industrial property development and investment projects including land acquisitions, RM23 million for working capital for its i-Park @ Senai Airport City development, RM9 million to complete the expansion of the group’s precast concrete fabrication capacity and the remaining RM10 million to defray listing expenses.

Lee said the group is looking to expand its industrial property business into other industrial areas such as those in Penang and Selangor.

On the precast concrete fabrication capacity expansion plan, Lee said the group had secured orders from Singapore taking up the upcoming new supply, as well as internal projects.

 Affin Hwang Capital Research has initiated coverage of AME with a “buy” rating at its retail IPO price of RM1.30 and a target price (TP) of RM1.83. Rakuten Trade Sdn Bhd also initiated a “buy” call on AME with a TP of RM1.48.