KJTS Group Berhad (“KJTS”), a provider of building support services in Malaysia, Thailand, and Singapore, has announced its unaudited financial results for the first quarter ending 31 March 2024 (Q1 FY2024). Despite incurring significant one-off listing expenses, the company has shown resilience and robust performance in its core segments.

Financial Highlights

Revenue: KJTS reported revenue of RM36.2 million for Q1 FY2024, marking a 14.95% increase compared to RM31.5 million in Q4 FY2023. The cooling energy and cleaning services segments were the main revenue drivers, contributing RM19.1 million (52.68%) and RM13.0 million (36.02%) respectively.

Geographical Performance: Malaysia remains the largest market for KJTS, generating RM29.2 million in revenue. Singapore, the company’s largest foreign market, contributed RM6.2 million, while Thailand added RM0.88 million.

Profitability: The company reported a Loss Before Tax (LBT) of RM0.15 million due to non-recurring listing expenses of RM4.26 million. Excluding these expenses, the adjusted Profit Before Tax (PBT) stood at RM4.11 million, reflecting the company’s underlying operational strength.

Segment Performance

Cooling Energy Segment: This segment was the highest contributor, with a revenue of RM19.1 million. It continues to be a critical growth area for KJTS, supported by strong market demand for cooling energy management services.

Cleaning Services Segment: Contributing RM13.0 million to the revenue, this segment has shown substantial growth and remains a key part of KJTS’s service offerings.

Key Developments

On 2 February 2024, KJTS’s subsidiary, KJTN Engineering Co., Ltd., signed a 15-year contract with Central World Hotel Company Limited (“CENTARA”) in Thailand. Valued at THB125.7 million (approximately RM16.8 million), this agreement will provide recurring revenue, reinforcing the company’s long-term financial stability.

Market Outlook and Future Prospects

KJTS is optimistic about its growth prospects, supported by Malaysia’s positive economic outlook and increasing demand in its core segments. The company’s recent IPO has provided the financial strength needed to scale operations and explore new growth opportunities.

The management has highlighted that strategic initiatives, particularly in the cooling energy segment, will drive future growth. Additionally, KJTS’s commitment to integrating Environmental, Social, and Governance (ESG) principles into its operations positions it well to meet the evolving expectations of stakeholders and regulatory bodies.

Investor Considerations

One key point for investors to note is that the public float of KJTS is relatively low while being reasonably valued. This stock is tightly held by institutional investors and the owners, who are required to serve a moratorium. This situation can lead to lower liquidity in the market, potentially impacting the stock’s price movements.

Conclusion

KJTS Group Berhad’s Q1 FY2024 results showcase a company with solid fundamentals and strong growth prospects. Despite the temporary impact of listing expenses, the underlying business remains robust, driven by strategic initiatives and a positive market outlook. Investors should consider the company’s growth potential alongside the implications of its low public float.