CONTINUING EXCITEMENT: A man works at a construction site of a building. More excitement is expected to be seen in Malaysia’s construction sector with several potential IPOs by local construction players in addition to notable contracts.

KUCHING: With several potential initial public offerings (IPOs) by local construction players in addition to notable contracts being awarded during May this year, more excitement is expected to be seen in Malaysia’s construction sector.

According to head analyst of ECM Libra Capital Sdn Bhd (ECM Libra) Bernard Ching, among potential IPOs was structural steel cum power plant contractor Eversendai Corp Bhd (Eversendai) with plans to list on Bursa Malaysia’s Main Market by mid-2011.

Previously, it was reported that the book-building for the IPO would kick off in June with the tentative prospectus launch date on June 10.

“According to its draft prospectus, Eversendai would be offering 232.2 million shares worth 50 sen each,” he highlighted in his online report. “This would represent 30 per cent of its enlarged share capital.

“Proceeds from the IPO would be used to fund Eversendai’s capital expenditure for increasing its fabrication capacity and business expansion of the firm’s operations in India and the Middle East.”

Another contractor, Nehemiah Reinforced Soil Sdn Bhd (Nehemiah) was en route to list on Bursa Malaysia in three years time. Nehemiah specialises in the design, supply and construction of its own patented proprietary reinforced soil retaining wall system.

This was on the back of notable contracts awarded during May; including TRC Synergy Bhd (TRC) being granted a fabrication contract worth RM45 million for the design, construction and other in-service support work for two Scorpene submarines.

Also, Muhibbah Engineering Bhd received the award for the pre-assembly of heavy lifting facility and tug pen breakwater caissons as well as the preparation of shipping barges for Gorgon LNG Jetty and Marine Structure Project in Australia. The contract was worth RM101 million.

“Meanwhile, the 17-kilometre light railway transit (LRT) extension is expected to attract a number of large international players,” Ching added.

“Reported to cost about RM1.5 billion, German engineering group Siemens, which is shifting its focus to be a player in Malaysia’s move to upgrade public transport, may well be making its bid with some of the biggest names in the world to build the backbone of the country’s mass public transport system.

“Besides Siemens, some of the big names that may be pitting for a slice of Malaysia’s transport system include Bombardier, Invensys, Samsung, Daewoo, Ansaldo and so on.”

Moving forward, ECM Libra pegged Sunway Holdings Bhd as its top buy of the sector thanks to its strong potential earnings growth, coupled with synergies from its upcoming merger with Sunway City Bhd to form Malaysia’s fifth largest property developer by market capitalisation.