Harrison White
Condominium developer JS Land launched it’s Initial Public Offering (IPO) on the Cambodia Securities Exchange (CSX) Growth Board aiming to raise $2.12 million to fund the development of its Garden Residency 2 as well as working capital.
The virtual roadshow will run from January 10 – 14, with the company officially listing on January 21. The company received approval from the regulator in December last year and is being brokered by RHB Securities.
The IPO will list 8,281,000 shares (32.21% of total shares) at KHR 1,900 or $0.467 per share putting the company’s market capitalization at $12 million. There will not be a guaranteed annual return.
According to the disclosure, 5,142,000 Shares have already been pre-allocated to three cornerstone investors Nordest ASIA Capital (2,571,000 shares), Phrontier Capital (1,285,500 shares) and CT Development PPC Limited (1,285,500 shares).
Raising capital to continue long term expansion
Dato Jack Yap, CEO of JS Land told Cambodia Investment Review the company decided to list shares on the CSX to show the transparency and good governance of its operations.
“We are very proud to be the first-ever developer to list shares on the local market and show the transparency and openness of JS Land as well as our ability to provide a strong return for our shareholders,” Jack said.
In response to why the company is offering no guaranteed dividend Jack stated: “We need to ensure we have working capital to continue buying land and building construction to achieve our long-term plan – this should provide our early investors with a strong foundation for stronger dividends in the future.”
Demand stable for affordable condominiums
The majority of funds will be directed towards the developer’s new 31-storey condominium is Phnom Penh’s Sen Sok District – with a one bedroom and two-bedroom unit at $39,000 with buyers can get a home with a $299 monthly payment with no interest nor down payment.
“Demand in the affordable condominium market [under $70,000] should remain strong – while the higher-end market may begin to drop over the next few years due to oversupply concerns,” Jack said.
The company expects to generate revenue and net profit of $23.47 million and $10.09 million respectively in 2023 from the sales of the Garden Residency 2 upon completion and handover of the project.
Cambodia Securities Exchange Growth Board gains second listing
The company will be the CSXs Growth Board second only listing after DBD Engineering last year.
The secondary board was set up in 2015 to attract listings from SMEs that were having problems raising capital or could not meet the higher requirements of the main board.
To list on the Growth Board companies need to have made a net profit in the last year or have a positive operating cash flow or gross profit margin of 10 percent or more. Shareholders’ equity must be more than 2 billion riels ($500,000) in comparison with the Main Board’s 30 billion riels ($7.5 million) minimum.
While the board was first established to act as a vehicle for raising capital – displaying strong transparency and good governance has become another major reason for listing with several companies’ stating intention to list this year.
