Gabungan AQRS confident of winning more projects, says its CEO

SEP 20, 2016, The Star
PETALING JAYA: Construction firm and property developer Gabungan AQRS Bhd remains confident of securing sufficient projects for its future developments despite losing out to LBS Bina Group Bhd in a privatisation bid for land in Ijok, Selangor.

According to an analyst report by Affin Hwang Capital, LBS had edged out Gabungan in winning the bid from the Selangor state government for 10 parcels of leasehold land in Ijok.

LBS, via its subsidiary Kemudi Ehsan Sdn Bhd, will develop affordable housing on five parcels, with estimated gross development value (GDV) of RM1.83bil, over 12 years. The development land has 99 years leasehold expiring in February 2111.

When contacted, Datuk Azizan Jaafar, the CEO of Gabungan AQRS said that the group is confident of securing more property development jobs going forward.

"The fact that we were part of the shortlisted candidates for the Ijok project, shows our potential to be involved in opportunities like this.

"We are shaping ourselves to be a property player and we will do it at our own progress, at a stable rate where we will not disrupt our cash flows.

"We now understand the tendering process better and are better positioned as a potential partner to the government," said Azizan.

In addition, Affin Hwang Capital said that Gabungan is negotiating for another potential affordable housing project in another location.

For the past four months, Gabungan has clinched several construction contracts amounting to RM1.25bil, which is expected to last the group for 36 months. These contracts are a RM508.22mil subcontract to complete bridge structure works for the Sungai Besi- Ulu Kelang Elevated Expressway (SUKE), a Perumahan Rakyat 1Malaysia (PR1MA) contract for 1,140 apartments in Dengkil, Selangor worth RM314mil, as well as a RM424.34mil PR1MA home development project in Kuantan, Pahang.

The group has also been shortlisted for the Light Rail Transit 3 (LRT3) project, which links Bandar Utama to Klang.

Affin Hwang Capital downgraded their earnings per share (EPS) forecasts for Gabungan by 7% to 12% for financial year 2017 to 2018 to remove the contribution from the Ijok project combined with the uncertaintyon securing another project in the state.

"Potential catalysts for upward re-rating are clinching the potential RM320mil Pahang administration centre project and receiving final approval for its One Jesselton mixed development project with GDV of RM1.8bil," it said.

Gabungan is waiting for the letter of award for the Pahang project, which Azizan expects to announce in three to four weeks’ time.

As for the One Jesselton project in Kota Kinabalu, Sabah, Azizan said that the group will be able to post an announcement on the project by early October.