‘Gabungan AQRS front runner for Pahang police HQ contract’

PETALING JAYA (Feb 27): Gabungan AQRS Bhd, which recently posted a turnaround in the financial year ended Dec 31, 2016 (FY2016), is believed to stand a good chance of securing the contract to build the police headquarters in Kota Sultan Ahmad Shah (KotaSAS), according to sources.

The contract value of the project is estimated to be in the range of RM160 million to RM200 million, sources said. This new contract plus others that it has recently secured are expected to boost the company’s order book by an additional RM800 million this year.

Gabungan AQRS stood on an order book of RM1.8 billion as at end-January, which is expected to sustain its performance for the next three years, the company said in the latest financial announcement to Bursa Malaysia last Thursday.

Gabungan AQRS in December secured a RM360.98 million contract to build the administrative capital, Pusat Pentadbiran Sultan Ahmad Shah, in KotaSAS via its wholly-owned subsidiary Gabungan Strategik Sdn Bhd.

The contract had been awarded by Kreatif Sinar Gabungan Sdn Bhd, a 30% owned associate of Gabungan AQRS. Tanah Makmur holds 65% and Sinar Realiti Sdn Bhd a 5% stake in Kreatif Sinar.

Datuk Azizan Jaafar is a common director of Gabungan AQRS and Tanah Makmur. Azizan is the chief executive officer of Gabungan AQRS.

Tanah Makmur last year received a takeover bid from the Tengku Mahkota of Pahang Tengku Abdullah Sultan Ahmad Shah to take the company private at RM1.90 per share.

Azizan currently holds a 13.32% stake in Gabungan AQRS through his private vehicle, Ganjaran Gembira Sdn Bhd. He is now the largest shareholder of Gabungan AQRS followed by the company’s founder Lim Ann Kok who pared down his stake to 12.03% last month. Lim sold some five million shares, equivalent to a 1.28% stake, through an off-market trade on Jan 25.

Azizan, who took the helm of the then-struggling firm in April 2016, has since steered the company towards a net profit of RM22.58 million in FY2016 compared to a net loss of RM9.67 million in FY2015.

The company posted a net profit of RM7.4 million for its fourth quarter ended Dec 31, 2016, up nine times from a net profit of RM733,000 in the previous corresponding quarter.

Quarterly revenue surged 83.5% to RM86.07 million from RM46.89 million on improved performance in both its construction and property development segments. For the full financial year, annual revenue grew 21% to RM330.06 million from RM272.51 million in FY2015.

Gabungan AQRS’ share price has since climbed to RM1.06 last Friday, up 17% from 90.5 sen year to date. The counter was highlighted as one of Macquarie Research’s “snap election plays” in its mid-year strategy note last year.

Affin Hwang Investment Bank and MIDF Research both have “buy” calls with identical target prices of RM1.24.

In a research note last Friday, MIDF analyst Fadhli Dzulkifly said he expected the replenishment of some RM200 million worth of potential jobs to be bagged in FY2017.

These would include Gabungan AQRS’ involvement in affordable housing in Pahang and roadworks related to the Pan Borneo Highway in Sabah, he said.

Going forward, the company stated in its filing with Bursa that it continues to bid actively in various tender exercises.

“[We have] successfully been pre-qualified and shortlisted to participate in the tender for the Bandar Utama–Klang light rail transit Line 3,” it said. The group is also eyeing civil and structural works for the East Coast Rail Line, for which it is confident in securing given its existing construction projects for the Pahang state government.

In Sabah, Gabungan AQRS said it was looking to undertake works for the Pan Borneo Highway project through its associate company, Sedco Precast Sdn Bhd. It owns a 49% stake in the precast products manufacturer, while the Sabah Economic Development Corp owns the remaining 51%.

This article first appeared in The Edge Financial Daily, on Feb 27, 2017.

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