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Looking at IPO Malaysia? Here’s another one coming in May 2021.

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If we love property investment, we could choose to buy a property. This is usually very expensive and we may need to continue paying and holding on to it for many years. We could choose to buy into Real Estate Investment Trust (REIT) which gives us continuous dividends, especially if there are some commercial buildings we love and this is part of a REIT fund. If we love a certain property but we could not afford, we could also buy the developer for that property too if the developer which is listed in the BURSA.

If you love the third idea, then here’s another one counter which is joining the Main Board and it’s real estate related too. Not as a developer but as a sub-contractor to many developments.

Article in thestar.com.my. Tuju Setia Bhd will be listed on the Main Market on May 19. It aims to raise RM56 million from its IPO on Bursa Malaysia.

Managing director Wee Eng Kong said, “The funds raised will help enhance our core competencies and position us to better undertake new projects currently being tendered worth RM4 billion.”

As at March 2021, Tuju Setia has secured four new contracts to build high-rise buildings, bringing its total order book to RM953.1 million, which would sustain earnings till 2024. The order book comprises Mutiara Central Office Suites (Cheras), Segambut’s Riana Dutamas – Phase 2, The Pulse Residence in Bandar Puteri Puchong, 121 Residences in Petaling Jaya, Desa Parkcity’s PPAM Sofiya Residensi, Emerald Hills – Phase 3 and 4 in Cheras, Shah Alam’s TUAI Residence and the Kajang Women and Children Hospital projects. Do read here for the full details: Article in thestar.com.my.

Why construction company and developer is different?

If developer completes the project and they could not sell fast enough, this affects its cash flow. A construction company will get paid when they have completed what they have been tasked to do. They do not need to wait for all the units to be sold to receive their money. This is why when we buy into a listed sub-contractor and a listed developer, we need to understand the difference. One may have to rely on winning the next construction contract while the other would have to rely on selling their developments quickly. Happy deciding yeah.

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Next suggested article: 30 IPOs expected in Malaysia for 2021. Are you ready?

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