Sharing from remisier

$TJSETIA / 5297 (TUJU SETIA BERHAD) Tuju Setia: From underdog to industry contender

Chasing Sunway supply chain
In 2024, the large cap contractors – Gamuda and Suncon shines through with major project wins including from the booming DC sector.

SunCon had started reserving its capacity for DC projects, leading to Sunway awarding residential construction contracts to external contractors, including Tuju Setia.

Construction should continue to shine in 2025, with attention shifting to second liners and smaller cap contractors as these players benefit from spillover contracts from large contractors. The pie is getting larger.

Who is Tuju Setia?
Tuju Setia Berhad, a leading construction services company in Malaysia, has solidified its position as a key player in the industry with significant contract wins throughout 2024. These projects span large-scale residential developments and healthcare facilities, contributing to a total contract value of approximately RM2.1 billion for the year. Below is a summary of their notable achievements:

2024 contract wins highlight

1. Milla Residence Project (Quartz Wangsa Maju, Kuala Lumpur)
Value: RM389 million
Scope: Construction of two 52-storey residential towers, common facilities, and a 17-storey automated car park with rooftop amenities.
Awarded by: Beverly WM Sdn Bhd, a wholly-owned subsidiary of Beverly Group Sdn Bhd.
Date: December 23, 2024
Duration: 36 months, commencing in April 2025.

2. Sunway Serene 2 Development (Kelana Jaya, Selangor)
Value: RM411 million
Scope: Construction of two 45-storey serviced apartment towers with podium carparks and facilities.
Awarded by: Sunway Serene Sdn Bhd, a wholly-owned subsidiary of Sunway Berhad.
Date: November 2024
Duration: 40 months.

3. Gleneagles Hospital Block C (Jalan Ampang, Kuala Lumpur)
Value: RM317.6 million
Scope: Design and construction of a new hospital block.
Awarded by: Ampang 210 Sdn Bhd.
Date: October 2024
Duration: 37 months.

4. Hype Residences (USJ 7, Subang Jaya, Selangor)
Value: RM248 million
Scope: Construction of two blocks of serviced apartments with associated facilities.
Awarded by: Sime Darby Property Berhad.
Date: August 2024

5. Alora Residences (USJ, Subang Jaya, Selangor)
Value: RM209 million
Scope: Main contractor works for two blocks of serviced apartments, podium carpark, and facilities floor.
Awarded by: USJ Citypoint Sdn Bhd, an indirect wholly-owned subsidiary of Avaland Berhad.
Date: January 2024
Duration: 33 months.

Key Highlights of 2024
Total Contracts Secured: RM2.1 billion
Order Book Strength: Tuju Setia’s order book now stands at an all-time high of RM2 billion, providing earnings visibility until 2028.
Diverse Portfolio: Projects range from high-rise residential developments to healthcare facilities, underscoring Tuju Setia’s versatility and expertise.

Valuation
Based on RM2.1bn contract value, 4 year construction period and a conservative 4% net profit margin, this translate to per annum net profit of RM21m.

Applying PER of 12x translates to market cap of RM252m (72 sen) against current market cap of around RM90m. The stock was listed at IPO price of 70 sen.