HSS Engineers eyes India, Middle East

KUALA LUMPUR: HSS Engineers Bhd, which aims to raise RM31.91 million from its listing on the ACE Market of Bursa Malaysia, is targeting to expand into India and Middle East to reduce dependency on the local market.
In 2015, 97.5% of the company’s revenue came from its Malaysian operations. It provides engineering design, construction supervision, project management as well as building information modelling services to the various industries including roads and highways, power generation and water resources.
HSS executive director and co-founder Datuk Kunasingam Sittampalam said the company is vying for infrastructure services contracts in India.
“The new Indian government is putting a lot of emphasis on the infrastructure, there is an opportunity for us to expand there as there is a need for better infrastructure,” he told a press conference here yesterday in conjunction with the prospectus launch.
HSS does have an office in Chennai, India. It also has one each in Kuala Lumpur and Penang.
For the Middle East market, Kunasingam said, the company is hoping to take advantage from the Expo 2020 in Dubai and the World Cup 2022 in Qatar.
“These are the two main drivers that will accelerate their infrastructure projects, there are opportunities for us to participate,” he explained.
Apart from that, HSS is looking to tap into the Asean market through acquisitions or strategic partnerships. However, Kunasingam said the company is not in serious talks with any companies as yet.
As at end-May, HSS had an outstanding order book of RM366 million.
“This order book which can last for two to five years will speak for itself, that's the testament to the outlook for the company,” Kunasingam replied when asked about the company's earnings projection for 2016.
HSS reported a 10.77% growth in net profit to RM10.13 million for 2015 compared with RM9.15 million in 2014.
Its initial public offering (IPO) entails the issuance of 95.72 million shares comprising a public issue of 63.82 million new shares and an offer for sale of 31.91 million existing shares.
Upon listing, it is expected to have a market capitalisation of RM159.54 million based on an issue price of 50 sen per share.
About 75% of the IPO proceeds will be used to fund the expansion into the Indian market and future ventures into support services for the water and power sectors in Malaysia.
Meanwhile, 12.6% of the proceeds will go to the repayment of bank borrowings and the balance for general working capital expenditure.