Azam Jaya eyes expansion amid Sabah’s construction boom

KUALA LUMPUR: Sabah-based infrastructure construction player Azam Jaya Bhd (AJB) aims to bid for more projects by capitalising on the state’s substantial growth in the construction industry, especially in regions where infrastructure development is much needed.

Executive director Datuk Jessica Lo Vun Che said the company plans to enhance its construction capabilities, strengthening its capacity to take on larger projects as part of its long-term strategies.

“We are committed to raising construction standards in Sabah to meet the region’s growing infrastructure demands.

“We are particularly encouraged by the federal government’s commitment to advancing development in Sabah, notably through the Budget 2025 allocations, in which Sabah received the highest development funding among the states.

“Azam Jaya welcomes the recent allocation of RM10 billion under Budget 2025 to complete the Sabah portion of the Pan-Borneo Highway, alongside the additional RM6.7 billion for development in Sabah,“ she said at the company listing on the main market of Bursa Malaysia yesterday.

This robust debut follows an IPO oversubscription of 23.00 times, reflecting strong confidence in Azam Jaya’s business operations and growth potential.

At the opening bell, Azam Jaya’s share price debuted at RM1.00, representing a premium of 28.21% over the issue price of RM0.78, with an opening volume of 5,126,000 shares.

The rose as much as 48.72% to touch its intra-day high of RM1.16 and closed at RM1.09.

“With the proceeds from our IPO totalling RM61.5 million, we are poised to accelerate our growth strategies in exciting ways.

“We are committed to enhancing our construction capabilities by expanding our fleet of machinery and equipment, ensuring we have the tools necessary to meet the demands of our expanding projects,“ Lo said.

Azam Jaya specialises in constructing large-scale road infrastructure in Sabah, including roads, highways, bridges, flyovers, and tunnels.

With over 30 years of experience in the industry, the group has a proven track record, having completed over 50 construction projects in the region.

“The listing of Azam Jaya is a testament to over 30 years of industry expertise navigating the complexities of road construction in Sabah.

“With fresh capital, we are well-positioned to accelerate our growth and seize new opportunities,“ Lo said.

On the financial front, Azam Jaya’s revenue grew from RM231.5 million in the financial year ended December 31, 2021 (FY21) to RM280.8 million in FY23, representing a 2-year compound annual growth rate (CAGR) of 10.1%.

Regarding dividend policy, Azam Jaya aims to distribute at least 30% of its net profit to shareholders.

From the proceeds raised, RM8.0 million (13.0%) will be allocated to boost construction capabilities and operational efficiencies by acquiring new machinery, equipment, and technological upgrades.

RM28.4 million (46.2%) has been set aside for working capital purposes, RM20.0 million (32.5%) is earmarked for repayment of bank borrowings, and RM5.1 million (8.2%) will be used to defray listing expenses.

Inter-Pacific Securities Sdn Bhd is the principal adviser, sole underwriter and sole placement agent for the IPO exercise.