THE MALAYSIAN RESERVE. 5TH MAY: Flat steel player YKGI Holdings Bhd is looking to diversify its existing business operations to include construction and property development.
It told the bourse today that the construction and property development businesses will potentially contribute 25% or more to the net profits or net assets of the group moving forward.
YKGI said its construction business venture began in 2019 with Asteel Development Sdn Bhd (ADSB), an 80.36%-owned indirect subsidiary of the group, undertaking construction and renovation works for the installation of industrialised building system products.
The construction business segment contributed approximately 3.36% to the revenue of the group for the financial year ended December 31, 2022.
Meanwhile, the property development business is a new venture for the company.
On February 20, 2023, ADSB accepted the terms and conditions offered by Housing Development Corporation, Sarawak (HDC) to undergo the property development project to develop affordable houses and apartments in Kuching, Sarawak.
YKGI said a formal agreement will be executed between ADSB and HDC in due course.
YKGI management believes that upon completion of the proposed development, the group will leverage its successful completion and property development track record, as well as the accumulation of sufficient experience by the property development team to embark on additional viable ventures relating to property development through organic and/or inorganic approaches.
The group has proposed to seek approval from its shareholders for the proposed diversification.
Shares in YKGI were unchanged at 12 sen today, while its market capitalisation stood at RM58 million.