SLGC Berhad IPO: G7 Construction Contractor With RM1B Order Book Heads to ACE Market
SLGC Berhad, a Klang Valley-based construction company, is set to list on the ACE Market of Bursa Malaysia on 6 October 2026 at an IPO price of RM0.28 per share. With an order book exceeding RM1.0 billion and a CIDB Grade G7 license that allows them to tender for projects of unlimited value, SLGC offers direct exposure to Malaysia's thriving construction sector.
This article covers everything investors need to know before applying for the SLGC Berhad IPO — from company profile, IPO price, share allocation, use of proceeds, financial performance, PE valuation, risk factors and investment perspective.
Who Is SLGC Berhad?
SLGC Berhad (SLC 0476) is a construction company founded in 2018, operating as a main contractor for building and civil engineering works. The company is headquartered in the Klang Valley and primarily operates in Selangor and Kuala Lumpur.
What sets SLGC apart from other contractors:
- CIDB Grade G7 license — the highest grade that allows the company to bid for government and private projects with no tender value limit. Only a small number of contractors in Malaysia hold this qualification
- Order book exceeding RM1.0 billion — providing strong revenue visibility for several years ahead
- Revenue CAGR of 13.7% (FYE2022-FYE2025) — demonstrating consistent growth over four years
- Shariah Compliant — approved by the Securities Commission's Shariah Advisory Council
Key projects in SLGC's order book include prominent residential and commercial developments such as Tamansari Rumah Selangorku (IOI Properties), 111 Menerung (Mah Sing), The Riva-Gravit8, Kamelia Residences, Tuju Residences / Arte Star, Seduduk D'Kajang, as well as the Daiwa Warehouse and Goldcoin Starhill projects.
Key IPO Dates & Details for SLGC Berhad
Here are the essential details investors need to know:
| Detail | Information |
|---|---|
| IPO Price | RM0.28 per share (28 sen) |
| Market | ACE Market, Bursa Malaysia |
| Application Period Opens | 10 September 2026 |
| Application Period Closes | 22 September 2026 |
| Listing Date | 6 October 2026 |
| Enlarged Share Capital | 560,000,000 shares |
| Market Capitalisation (IPO) | RM156.8 million |
| PE Ratio | 11.20x (based on FYE2025 EPS of 2.50 sen) |
| Pro Forma NA Per Share | RM0.10 |
| Shariah Compliant | Yes (SAC approved) |
| Principal Adviser | M & A Securities Sdn Bhd |
| Issuing House | Tricor Investor & Issuing House Services Sdn Bhd |
Offer Structure & Share Allocation
The SLGC IPO comprises two main components with a total of 168,000,000 shares (30.0% of the enlarged share capital):
Public Issue — 105,000,000 New Shares
A total of 105 million new shares will be issued, representing 18.75% of the enlarged share capital. Allocation breakdown:
- 70,000,000 shares — Private placement to Bumiputera investors approved by MITI (66.67% of public issue)
- 14,000,000 shares — Public issue to the Malaysian public
- 14,000,000 shares — Public issue to the Bumiputera Malaysian public
- 5,000,000 shares — Placement to selected investors
- 2,000,000 shares — Allocation to directors, employees and individuals who contributed to the company's success
Offer for Sale — 63,000,000 Existing Shares
A total of 63 million existing shares will be offered by existing shareholders, representing 11.25% of the enlarged share capital.
Notably, the majority of new shares (70 million or 66.67%) are allocated through MITI placement, while only 28 million shares are available to the Malaysian public (14 million general + 14 million Bumiputera). This means competition for public allocation may be quite intense.
Use of IPO Proceeds (RM29.40 Million)
From the public issue proceeds of RM29.40 million, the funds will be allocated as follows:
| Purpose | Amount (RM Million) | Percentage |
|---|---|---|
| Construction Machinery & Equipment | RM9.243 | 31.44% |
| General Working Capital | RM7.500 | 25.51% |
| Repayment of Bank Borrowings | RM7.557 | 25.70% |
| Listing Expenses | RM4.600 | 15.65% |
| Upgrade Construction Management Software | RM0.500 | 1.70% |
The use of proceeds reveals several key points:
- Machinery investment (31.44%) — the largest portion is allocated for purchasing construction machinery and equipment, which should reduce reliance on subcontractors and improve profit margins
- Debt repayment (25.70%) — using a significant portion to repay bank borrowings is positive as it will help reduce the currently high gearing ratio
- Digitalisation (1.70%) — while small, the allocation for construction management software upgrades signals a move towards operational efficiency
Financial Performance of SLGC Berhad
Based on prospectus data, SLGC shows a consistent revenue growth trend:
| Metric | FYE2022 | FYE2023 | FYE2024 | FYE2025 | FPE Apr 2026 |
|---|---|---|---|---|---|
| Revenue (RM'000) | 220,735 | 213,931 | 229,642 | 324,004 | 149,224 |
| Gross Profit (RM'000) | 20,297 | 25,258 | 40,213 | 50,787 | 20,673 |
| PAT (RM'000) | 1,134 | 5,729 | 16,030 | 13,985 | 6,009 |
| Gross Profit Margin | 9.2% | 11.8% | 17.5% | 15.7% | 13.9% |
Key observations from the financial performance:
- Strong revenue growth — from RM220.7 million (FYE2022) to RM324.0 million (FYE2025), with a CAGR of 13.7%. The largest jump occurred in FYE2025 (+41.1%), indicating accelerated project revenue recognition
- Improving gross margins — from 9.2% (FYE2022) to a peak of 17.5% (FYE2024), showing improved operational efficiency. However, margins have since dipped to 15.7% in FYE2025 and 13.9% in FPE Apr 2026
- PAT declined in FYE2025 — despite a 41% revenue surge, PAT actually fell from RM16.0 million (FYE2024) to RM14.0 million (FYE2025), potentially due to higher financing costs or IPO-related expenses
- FPE Apr 2026 shows normalisation — for the first 4 months of FY2026, revenue of RM149.2 million (annualised ~RM448 million) indicates continued growth momentum
Valuation & PE Ratio Analysis
Based on prospectus information:
- IPO Price: RM0.28 per share
- EPS (FYE2025, enlarged basis): 2.50 sen per share (RM13.985 million / 560 million shares)
- PE Ratio: RM0.28 / RM0.025 = 11.20x
- Market Capitalisation: RM156.8 million
- Pro Forma NA Per Share: RM0.10
- Price/NAV Ratio: RM0.28 / RM0.10 = 2.80x
A PE ratio of 11.20x for an ACE Market construction company can be considered moderate. For comparison:
- The average PE for Bursa Malaysia's construction sector typically ranges from 8-15x
- Construction companies with strong order books (>RM1 billion) often trade at 10-14x PE
- Large-cap players like Gamuda and IJM trade at 15-20x PE, though they are Main Market companies with longer track records
The Price/NAV ratio of 2.80x is relatively high, indicating investors are paying a premium over the company's net asset value. This is common for "asset-light" construction companies with large order books but relatively low tangible assets.
Key Shareholders (Post-IPO)
After listing, SLGC's shareholding structure is as follows:
| Shareholder | Direct Holding | Indirect Holding |
|---|---|---|
| Yong Zhen Lin (Managing Director) | 59.60% | 1.83% |
| Liong Yan Herng | 4.29% | — |
| Loo Chun Kok | 4.29% | — |
Yong Zhen Lin, the founder and Managing Director, remains the majority shareholder with a combined holding of 61.43% post-IPO. This high retention signals the founder's confidence in the company's prospects, but also means the company is heavily dependent on this individual for strategic direction.
Risk Factors Investors Should Know
This is a critically important section. SLGC has several risk factors that require serious consideration:
1. High Gearing Ratio (3.28x)
As at FPE April 2026, SLGC's gearing ratio stands at 3.28 times — meaning the company's debt is more than 3 times its shareholders' equity. For context, a gearing ratio below 1.0x is generally considered healthy for construction companies. A ratio of 3.28x is very high and indicates significant reliance on debt financing.
2. Financial Covenant Breaches
More concerning, SLGC has breached financial covenants in both FYE2024 and FYE2025. This means the company failed to comply with conditions set by its lending banks. While the banks may have granted waivers, this is a warning sign that should not be taken lightly.
3. Cyclical Construction Industry
The construction sector is highly dependent on economic conditions, government policies and property market cycles. When the economy slows or the property market weakens, construction companies are among the first to be affected.
4. Key Person Dependency
With Yong Zhen Lin holding over 61% of shares and leading the company, SLGC is highly dependent on this individual. Any change in leadership could significantly impact operations and strategic direction.
5. Aged Trade Payables
38.53% of SLGC's trade payables have exceeded 90 days. This indicates the company is taking a long time to pay its suppliers and subcontractors — a sign of cash flow stress that warrants attention.
6. Customer Concentration & No Dividend Policy
SLGC faces customer concentration risk where losing one or two major customers could have a significant impact. Additionally, the company has no formal dividend policy, meaning investors seeking regular income may be disappointed.
Investment Perspective: Strengths & Risks
Strengths
- Order book exceeding RM1.0 billion — providing revenue visibility for several years ahead. Projects from reputable developers like IOI Properties and Mah Sing add credibility
- Consistent revenue growth — a 13.7% CAGR over 4 years demonstrates the company's ability to consistently win and execute projects
- CIDB G7 license — the highest qualification opening doors to bid for high-value mega projects
- Shariah Compliant — enabling Shariah-compliant investors to participate in this IPO
- Positive construction sector sentiment — government mega projects like MRT3, data centre developments and the Johor-Singapore zone provide tailwinds for the broader construction sector
Risks
- Very high gearing ratio (3.28x) — among the highest for recent construction IPOs, elevating the company's financial risk
- Financial covenant breaches — failing bank conditions in FYE2024 and FYE2025 is a serious red flag
- Declining gross margins — from a peak of 17.5% to 13.9%, suggesting rising costs or competitive pressures
- Aged trade payables — 38.53% past 90 days indicates cash flow strain
- Key person dependency — excessive reliance on a single founder
- High P/NAV (2.80x) — investors paying a significant premium over net asset value
Read the full SLGC Berhad prospectus analysis →
Who Should Consider This IPO?
The SLGC Berhad IPO may be suitable for:
- Investors bullish on the construction sector — if you believe Malaysia's construction sector will continue to thrive with government mega projects and property development
- Investors who understand high-gearing risks — and are willing to accept higher financial risk in exchange for growth potential
- Medium to long-term investors — the >RM1 billion order book provides a foundation for multi-year growth, though cyclical risks must be factored in
This IPO may be less suitable for:
- Investors who prioritise financial stability and low debt ratios
- Investors seeking regular dividends
- Conservative investors who are uncomfortable with financial covenant breaches
How to Apply for the SLGC Berhad IPO
Interested investors can apply for the SLGC Berhad IPO through several channels:
- ATM — Visit an ATM of the appointed bank and follow the on-screen instructions
- Internet Banking — Log in to the appointed bank's online banking portal and look for the "IPO Application" section
- M+Global App — For M+ Online/MPlus clients, apply directly through the trading application. Refer to our guide on how to apply for IPOs via MPlus Global for detailed steps
- MITI — For Bumiputera investors, MITI IPO applications can be made through the MySaham MITI portal
The application deadline is 22 September 2026. Ensure your application is submitted before this date.
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Frequently Asked Questions (FAQ)
What is the SLGC Berhad IPO price?
The SLGC Berhad IPO price is set at RM0.28 per share (28 sen). Based on this price and 560 million enlarged shares, the company's market capitalisation after listing is RM156.8 million.
When is SLGC listing on Bursa Malaysia?
SLGC is scheduled to list on the ACE Market of Bursa Malaysia on 6 October 2026. The IPO application period runs from 10 September to 22 September 2026.
What does SLGC Berhad do?
SLGC is a main contractor for building and civil engineering works. The company holds a CIDB Grade G7 license and has an order book exceeding RM1.0 billion, including projects from reputable developers such as IOI Properties and Mah Sing.
Is SLGC Berhad Shariah compliant?
Yes, SLGC Berhad has been approved as Shariah compliant by the Securities Commission's Shariah Advisory Council (SAC).
What are the key risks of investing in SLGC's IPO?
Key risks include a very high gearing ratio (3.28x), financial covenant breaches in FYE2024 and FYE2025, key person dependency (Yong Zhen Lin), aged trade payables (38.53% past 90 days) and no formal dividend policy.
Conclusion
SLGC Berhad offers direct exposure to Malaysia's thriving construction sector, backed by an order book exceeding RM1.0 billion and consistent revenue growth. The PE ratio of 11.20x also sits within a reasonable range for the construction sector.
However, investors should exercise caution with several notable red flags — particularly the 3.28x gearing ratio and repeated financial covenant breaches. These factors indicate higher financial risk compared to the average construction IPO.
As with any IPO, investment decisions should be based on thorough research and individual risk tolerance. Don't be swayed solely by a large order book — understand the risks hidden behind the numbers.
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