- Offers 125,000,000 Shares;
- Offer Price Range between HK$1.18 and HK$1.38 per Share
HONG KONG – (ACN Newswire) – JBB BUILDERS INTERNATIONAL LIMITED (“JBB” or the “Company”, together with its subsidiaries, the “Group”), an established engineering contractor based in Malaysia that focus on providing marine construction services as well as building and infrastructure services, announced the details of its proposed global offering (the “Global Offering”) and listing of shares (the “Listing”) on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”).
Offering Details
JBB intends to offer a total of 125,000,000 shares (the “Offer Shares”), of which 50% or 62,500,000 shares are for international placing (subject to reallocation and over-allotment option) and 50% or 62,500,000 shares are for Hong Kong public offering (subject to reallocation) (the “Hong Kong Public Offering”). The indicative offer price range is between HK$1.18 and HK$1.38 per Offer Share. After deduction of relevant expenses and assuming an offer price of HK$1.28 per Offer Share, being the mid-point of the indicative offer price range, and assuming the over-allotment option is not exercised, the net proceeds are estimated to be approximately HK$138.2 million.
The Hong Kong Public Offering has commenced today (25 April 2019 (Thursday)) at 9:00 a.m. and will end at noon on 30 April 2019 (Tuesday). The final offer price and allotment results are expected to be announced on 9 May 2019 (Thursday). Dealing of JBB’s shares is expected to commence on the Main Board of SEHK on 10 May 2019 (Friday) under the stock code 1903. Shares will be traded in board lots of 2,000 shares each.
Alliance Capital Partners Limited is the sole sponsor, while Alliance Capital Partners Limited and Upbest Securities Company Limited are the joint global coordinators, joint bookrunners and joint lead managers of the Global Offering.
Investment Highlights
Overview
During the three years ended 30 June 2018 and the four months ended 31 October 2018 (the “Track Record Period”) and up to 15 April 2019, the Group has completed a total of 29 marine construction contracts and 10 building and infrastructure contracts with an aggregate original contract sum of approximately RM1,398.6 million. As at 15 April 2019, the Group had a total of 21 ongoing contracts with an aggregate original contract sum of approximately RM1,144.6 million, and outstanding contract sum (taking into account the adjustments and variation orders) of approximately RM817.8 million.
One of the key marine construction players in Malaysia with proven track record in undertaking large scale marine construction contracts
According to Ipsos Sdn. Bhd. (“Ipsos”), JBB’s industry consultant, JBB is a well-established key marine construction player in Malaysia with a proven track record, and is one of the key active marine construction players in Johor, Malaysia which has reclaimed approximately 41.5% in terms of the total land areas reclaimed for the state of Johor in Malaysia from 2013 to 2017.
The Group’s track record in key large-scale projects undertaken and extensive experience in marine construction project have enabled it to build a strong reputation in the marine construction industry in Malaysia and which in turn provides an edge in tendering for and securing new and large scale business. Subsequent to the Track Record Period and up to 15 April 2019, JBB has submitted 11 tenders and quotations with an aggregate contract sum of approximately RM465.2 million, of which the results are still pending.
Ability to provide suitable solutions with strong execution capabilities and thereby maintaining stable relationships with key customers
JBB’s ability to provide integrated solutions for a project through a flexible approach and expertise in managing marine construction works coupled with its strong execution capability, which has allowed the Group to build a solid customer base including property developers based in Malaysia and overseas. It is also the preferred transportation agent of the sole authorised agent of sand concessions owners in Johor.
Extensive network of major suppliers and subcontractors
JBB has established and maintained a stable working relationship with a network of subcontractors that facilitates flexibility in pricing and selection, and could reduce the risk of shortage or delay in delivery, which might cause material disruption to project execution, thereby ensuring efficient and organised completion of the projects. In particular, JBB has entered into master framework agreements with 19 vessel owners to exclusively make available their vessels to the Group whenever requested and directed. During the Track Record Period, an aggregate of 47 sand carriers were supplied to the Group by these vessel owners.
Future Strategies
According to Ipsos, the Malaysian construction industry is an important economic indicator and forms the foundation of a nation’s development while marine construction works are said to represent around 10% of the total construction industry in Malaysia in terms of value of construction work done in general. Ipsos forecasts a CAGR (compound annual growth rate) of around 11.2% for the value of marine construction works from 2018, which is forecast to reach approximately RM23.8 billion by the end of 2022. This is in line (i) with the optimistic outlook for growth and development of the coastal regions in Malaysia due to the increase in overall population in Malaysia; (ii) the ongoing commencement of public infrastructure projects, development of new townships and infrastructure extension under the 11th Malaysia Plan ; and (iii) the government’s vision to have all buildings and cities ‘smart’ and interconnected through the National Transformation initiative.
In future, JBB will continue to strengthen its presence and market leading position in the marine construction industry in Malaysia, particularly in Johor. To do that, the Group plans to expand and invest in procuring its own vessels and new machineries, enhance its operational efficiency as well as bolstering its capacity to capture the attractive growth opportunities in its building and infrastructure works segment.
Use of Proceeds
The net proceeds of the Global Offering, based on an offer price of HK$1.28 per share (being the mid-point of the indicative offer price range), after deduction of underwriting fees and other estimated expenses paid and payable by JBB in connection with the Global Offering and assuming the over-allotment option is not exercised, are estimated at approximately HK$138.2 million and will be used as follows:
Items / Percentage
Acquiring one rebuilt sand carrier: 57.9%
Purchasing new land-based machineries: 7.3%
Satisfying performance bonds requirement of prospective projects: 23.4%
Recruiting and expanding management team for building and infrastructure services: 3.4%
Upgrading information technology and project management systems: 0.6%
Working capital purposes and general corporate purposes: 7.4%
About JBB Builders International Limited
JBB is an established engineering contractor based in Malaysia and is one of the key active players in the marine construction industry in Johor, Malaysia according to Ipsos. The Group provides two major types of services including (1) marine construction services – which can be categorised into (i) reclamation and related works; and (ii) marine transportation; as well as (2) building and infrastructure services – including general building works in construction of properties and infrastructure works. From 2013 to 2017, the Group has reclaimed land estimated to be approximately 41.5% in terms of total land areas reclaimed for Johor in Malaysia, the second-most populous state in the country. During the Track Record Period, the Group’s customers include contractors and developers from Malaysia, Japan and the PRC. For more details about JBB, please visit their website: http://www.jbb.com.my
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Hillary Lee Tel: (852) 2114 4109 Email: hillary.lee@sprg.com.hk
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