Engineering and construction remain Bintai Kinden’s main focus

KUALA LUMPUR (March 20): Bintai Kinden Corp Bhd has decided to focus on its core businesses of mechanical and electrical (M&E) engineering services as well as construction for now to ensure profitability. Property development, meanwhile, will take a back seat amid the soft property market.

The group will leverage on its expertise in the M&E and construction sectors which currently offer more promising opportunities, said group managing director (MD) Ong Choon Lui.

“We are in no rush to develop or launch new properties — M&E and construction remain the group’s main focus for now. In fact, we are aiming for more concession projects,” Ong told The Edge Financial Daily.

Bintai Kinden is acquiring a 100% equity interest in Optimal Property Management Sdn Bhd (OPM), a special purpose vehicle principally involved in property management, which will allow the group to diversify its portfolio to include the concession arrangements business.

OPM holds a 25-year concession worth RM121 million to design, construct, complete, operate and maintain the entire in-campus accommodation for Kolej Universiti Islam Melaka. Following the acquisition, Bintai Kinden will be involved in the maintenance and management of the campus accommodation and other facilities.

Bintai Kinden is also highly involved in the mass rapid transit (MRT) project, whereby it serves as the electrical contractor for several of the MRT stations. With that, it is looking to bid for more government infrastructure projects.

Still, Ong did not deny that the outlook for the construction and M&E sectors in the short term remains flattish as foreign direct investments (FDIs) are set to decline, especially from the US following its decision to withdraw from the Trans-Pacific Partnership trade deal.

He implied that there will be less job offers for construction players to cater for American companies — who are among the largest foreign investors in the region — intending to set up operations in Malaysia.

“Our businesses in Malaysia and Singapore are growing just slightly, if not stagnant. However, we are doing much better [elsewhere in the region] especially in Vietnam, which is [benefitting from the increasing inflow of FDIs] due to low labour and operating costs,” he said.

“This, in turn, bodes well for us because demand for more office spaces and other peripheral facilities from foreign companies are rising — this is where we [lend] our expertise,” he added.

Still, prioritising its M&E and construction businesses does not mean the property division will come to a halt.

“We will [keep an eye out] for prospective development projects. We are still in our ‘planning stage’ though, whereby we are doing our market research and planning for developments which would give future buyers better value,” Ong said.

The group managed to narrow its net loss by 87.1% to RM1.05 million for its third financial quarter ended Dec 31, 2016 from RM8.13 million a year earlier on lower operating expenses due to lower impairment losses.

Bintai Kinden’s share price closed half a sen higher at 24 sen last Friday, with a market capitalisation of RM69.02 million.

This article first appeared in The Edge Financial Daily, on March 20, 2017.

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from TheEdgeProperty.com http://www.theedgeproperty.com.my/content/1099247/engineering-and-construction-remain-bintai-kinden’s-main-focus

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