Property developer WMG makes poor debut on Bursa

KUALA LUMPUR: WMG Holdings Bhd which assumed the listing status of Tekala Corp Bhd on Bursa Malaysia’s Main Market yesterday, failed to impress closing at 43 sen, 10.4% below its issue price of 48 sen.
The counter opened however on a two sen premium, at 50 sen.
“The listing is timely not only allow to us to tap into the capital market for future land banking opportunities, but also raise our corporate profile as we plan to undertake approximately RM1.3 billion worth of pipeline projects,” group managing director Quek Siew Hau told reporters at the listing ceremony yesterday.
The Sabah-based property developer will develop 44.12 acres of land from its existing land bank of 620 acres. About 442 acres of its land is in Sandakan and 178 acres in Kota Kinabalu.
The first of these projects are expected to be rolled out in 2017 and funded via a combination of internally generated funds and bank borrowings.
Additionally, the gross development value of the group’s ongoing projects include the Mydin Hypermarket in Sandakan, which currently stands at RM445.1 million. Of these projects, 50% comprise of commercial properties while the other half are residential.
WMG which sees demand in landed properties said it will be concentrating on such properties moving forward.
“We will keep buying land when there is opportunity to buy. Land is the stock for any developer,” WMG executive director Lim Ted Hing said.
WMG also appears to be positive on the prospects of the property market in Sabah and “is confident of maintaining its leading position.”
Lim claimed that as at 2015, its market share in the residential space development area was at 19.3% for Sandakan and 7.1% for Kota Kinabalu whereas its market share for commercial development in Sandakan stood at 53.7%.
The company registered a revenue of RM95.1 million for the financial year ended Dec 31, of which 75.1 million or 79% came from the property development segment while the remaining 21% or RM20 million came from the building materials segment.
The group assumed its listing status after embarking on a reverse takeover of loss-making timber processing firm Tekala, for RM511.28 million. The exercise saw the exchange of 100 Tekala ordinary shares for 133 new WMG ordinary shares.
Following the exercise, Tekala’s public shareholders hold a 31.3% interest in WMG whereas WMG holds a 56.3% stake in the group.