KTI Landmark managing director and CEO Dr Gordon Loke (fifth from left) and substantial shareholder Chin Mee Leen (sixth from right) during the company's debut on the ACE Market. (Photo by Shahrin Yahya/The Edge)

KUALA LUMPUR (June 19): Sabah-based integrated property developer KTI Landmark Bhd (KL:KTI) made a lacklustre debut on Bursa Malaysia on Wednesday, becoming the third company so far this year to close below the initial public offering (IPO) price on the first trading day.

KTI closed the day at 28.5 sen, down 5% or 1.5 sen from its IPO price of 30 sen. After opening flat at 30 sen, the ACE Market stock failed to move higher for the rest of the day while its intraday low was 28 sen.

It was among the top 20 active counters on the exchange, with 35.01 million shares traded.

At the closing price of 28.5 sen, KTI's market capitalisation stands at RM228 million on an enlarged share capital of 800 million shares.

The company had expected to have a market capitalisation of RM240 million upon listing, which would have valued it at 17.4 times its price-earnings multiple — based on its earnings per share of 1.7 sen for the financial year ended Dec 31, 2023.

Of the 19 IPOs so far this year on Bursa Malaysia, only three had fallen on their maiden day of trading. Besides KTI, the others are ACE Market-listed Master Tec Group Bhd (KL:MTEC), which closed 7.69% below its IPO price of 39 sen; and Main Market-listed MKH Oil Palm (East Kalimantan) Bhd (KL:MKHOP), which finished 0.81% below its IPO price of 62 sen.

A research house, Mercury Securities Sdn Bhd, had urged investors to participate in KTI's IPO, saying the company would offer an attractive investment prospect with growth opportunities in Sabah's property market, driven by its unique partnership with the Housing and Urban Development Board and a strong project pipeline, which includes a mix of premium property and affordable housing developments.

Commenting on the company's flat debut at a press conference following the listing ceremony, KTI executive director Wilson Loke said the price was acceptable considering the challenging property sector.

“We look at the long run. Even though the opening is not fully green, we are okay. The property sector is a more challenging sector among all the other sectors, and we have remained resilient for the past two to five years,” Loke said.

“I would say that a property counter, to me, is all about whether the company is trustworthy or not. I think trust is a very notable thing in our industry, especially in property and also in Sabah,” he said. "We just hope to have the chance to build the trust with the investors moving forward.”

To date, KTI has delivered projects with a total gross development value (GDV) of RM1.2 billion, of which RM1 billion has come from the provision of design-and-build construction projects, with the remaining RM207.6 million from its own property development projects.

The company’s notable projects include Taman Wawasan in Beaufort, Taman La Gloxinia in Papar, Taman Seri Lemawang in Tuaran, as well as Taman Nelly, Taman Lavender and The Logg in Kota Kinabalu.

KTI’s sale of new shares raised RM48 million, of which RM20.7 million or 43.1% has been earmarked for general working capital. The company also plans to use RM18 million (37.5%) of the proceeds to acquire land for development, with the balance to repay bank borrowings and defray listing expenses.

The offer-for-sale, meanwhile, raised RM13.5 million, which will accrue entirely to selling shareholders — managing director Loke Theen Fatt and his wife Chin Mee Lee, who will retire and relinquish all of her directorships and involvement in KTI once the listing is completed.