Ho Hup exits PN17 status

by **Cals** Tue 06 May 2014, 17:19

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Tuesday, 06 May 2014 10:18

KUALA LUMPUR: Ho Hup Construction Co Bhd has ceased to be a PN17 designated company effective yesterday, following Bursa Malaysia’s approval for its early upliftment of the status.

The regulator vide its letter on May 2 said Ho Hup had regularised its financial conditions and no longer triggers any of the criteria under paragraph 2.1 of PN17 of the Main Market listing requirements.

Ho Hup completed its financial regularisation exercise and corporate turnaround on Dec 31 last year and applied for an early upliftment from PN17 designation as the group had already achieved seven quarters of profits.

Under Bursa Malaysia’s guidelines, a company can apply to exit PN17 status following two consecutive quarters of operational profit after completion of its financial regularisation scheme.

Ho Hup achieved a net profit of RM22.5 million for the financial year ended Dec 31, 2013 (FY13) and a net profit of RM11.3 million for the first quarter ended March 31, 2014 (1QFY14).

“We are delighted by the approval for the earlier exit and this is a testament to the solid turnaround in the group’s operations since 2012,” Ho Hup chief executive officer Derek Wong Kit Leong said in a statement yesterday.

Ho Hup said the upliftment is expected to put the group on a much stronger footing in its bid for infrastructure construction and development projects in Malaysia and the region.

For 1QFY14, Ho Hup’s net margin stood at 13.7%, with a net profit of RM11.3 million on revenue of RM82.4 million. Earnings per share for the quarter stood at 6.66 sen, up from 0.37 sen per share in 1QFY13.

Revenue from the construction division jumped to RM39.1 million in 1QFY14, from RM10.6 million in the previous corresponding quarter. Ho Hup said this was due to positive progress of existing projects in Malaysia and Iraq.

Property development revenue, which jumped to RM33.3 million from RM6 million, was mainly derived from the progress of the development of Parcel A of Aurora Place in Bukit Jalil, mainly from sales of shop offices, smart offices versatile offices and retail lots.

Aurora Place was first launched in the fourth quarter of 2012, and is developed by Ho Hup’s now wholly-owned subsidiary Bukit Jalil Development Sdn Bhd (BJD). Ho Hup purchased the remaining 30% stake it did not own in BJD in March for RM35.97 million.

Meanwhile, profits from the ready mix concrete division improved due to suppliers rebate from early settlement of purchases of raw material.

Going forward, Wong said Ho Hup will pursue major infrastructure and civil construction projects where it has the expertise and track record.

“We are actively looking for additional development projects with the view to build up our landbank by joint ventures or acquisitions,” he added.

Ho Hup closed down eight sen or 5% at RM1.52 yesterday, giving it a market capitalisation of RM355.1 million.

This article first appeared in The Edge Financial Daily, on May 6, 2014.