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SAG Sets Sights on Growth with RM0.88 Fair Value Backing Johor Expansion, Steel Upstream Play and RM388.6 Million Unbilled
Signature Alliance Group Berhad (KLSE: 0360), a rising player in Malaysia’s interior fit-out and construction space, is poised for steady growth following its upcoming IPO on Bursa Malaysia. Malacca Securities estimates a fair value of RM0.88 per share, implying a 41.9% upside from its IPO price of RM0.62, supported by a 3-year earnings CAGR of 9.7% driven by geographic expansion, upstream integration and a robust tender pipeline.
Established in 2009, SAG has evolved into a project-based service provider focused on interior fit-out and light construction projects across commercial, residential, and industrial segments. As at the latest practicable date, the Group has completed 624 projects, with 24 ongoing, underpinned by unbilled contracts totalling RM388.6 million. The majority of revenue is derived from commercial properties (75.2%), with remaining contributions from industrial (18.4%) and residential (6.4%) developments.
Resilient Growth Backed by Strong Financials
SAG’s revenue soared 122.6% year-on-year to RM386.0 million in FY2024, from RM173.4 million previously, reflecting the Group’s ability to scale execution capacity amid robust project awards. The Group’s core segment: interior fit-out services, continues to dominate revenue, driven by project wins in high-specification commercial and industrial spaces.
Net margins improved to 10.5% in FY2024, up from 6.0% in FY2023, reflecting better project mix and cost optimisation. Net cash from operations rose to RM27.6 million, while the balance sheet expanded to RM274.4 million in total assets, with equity rising to RM66.1 million. Gearing remains elevated pre-IPO, though expected to normalise post-listing.
Malacca Securities forecasts core PATMI to grow to RM47.3 million, RM50.4 million, and RM53.5 million over FY2025 to FY2027. This growth will be supported by:
Ongoing replenishment from a RM1.1 billion tender book,
Timely expansion into Johor and Penang in tandem with major property rollouts and economic zone development, and
Upstream integration into steel fabrication, which enhances control over cost, timelines, and design flexibility.
Strategic Expansion and Differentiation
SAG’s future growth will be anchored by its expansion into Johor, amid rising FDI, government tax incentives, and the establishment of the Johor-Singapore Special Economic Zone (JSSEZ). These macro tailwinds are expected to stimulate demand for premium interior solutions across corporate offices, business parks, and industrial hubs.
At the same time, SAG is leveraging its CIDB Grade G7 certification to tender for higher-value contracts. As of FY2024, SAG has secured 453 interior fit-out projects valued at RM436.4 million, with average tender submissions of nine per week. The Group also plans to roll out in-house steel and stone fabrication, which should not only enhance margins but also support customisation and project control.
Market Position and Valuation
With a reported market share of 8.1% in Malaysia’s interior fit-out industry, SAG is well-positioned to ride on broader sectoral momentum. According to DOSM, the overall value of construction work grew 20.2% in 2024, while the interior fit-out segment surged 62.3% year-on-year to RM1.99 billion, a figure expected to grow to RM2.9 billion by 2027, driven by evolving demands for functional and aesthetic workspaces.
Malacca Securities’ valuation of RM0.88 per share is based on an 18.0x P/E multiple on FY26F mid-cycle EPS of 4.88 sen. This is aligned with sector peers within the Bloomberg GICS Construction & Engineering index, which trade between 17.9x and 23.1x forward earnings.
Risks and Mitigation
Key risks to SAG include its dependence on project-based revenue with no recurring streams, reliance on key executives and subcontractors for execution, and potential working capital strain from upfront procurement costs. Nonetheless, these are partially mitigated by a diversified client base, progressive billing mechanisms, and ongoing investments into upstream integration.
ESG Commitment
SAG has articulated a forward-thinking ESG agenda:
Environmental: Adopts FSC-certified wood, low-VOC materials, and is piloting a waste segregation system.
Social: Offers skill conversion programmes for semi-skilled workers and enforces strict site safety measures aligned with CIDB standards.
Governance: Enforces anti-bribery policies with board-level oversight and conducts periodic ESG materiality assessments.
Conclusion
With strong financial fundamentals, a high-quality orderbook, strategic expansion plans, and alignment with secular growth in Malaysia’s property development and ESG-compliant construction space, SAG presents an attractive value proposition. At a fair value of RM0.88, the Group offers a compelling case for investors seeking exposure to the midstream construction value chain with scalable upside.
Signature Alliance Group Berhad: A Scalable Interior Fitting-Out Specialist with Forward Growth Visibility
Signature Alliance Group Berhad (“SAG”), a seasoned interior fitting-out service provider, is poised to list on the ACE Market of Bursa Malaysia on 5 June 2025. Priced at RM0.62 per share with a public issue of 260 million new shares, the IPO values the company at RM620.0 million, translating into a historical price-to-earnings (P/E) ratio of 15.3 times based on FY2024 earnings.
While this valuation sits within a fair range for the construction-related sector, it becomes more compelling when considering the Group’s forward earnings potential.
As at 16 April 2025, SAG held RM388.6 million in unbilled contract value from an overall RM902.4 million project pipeline, a figure expected to be progressively recognised over the next one to two financial years.
This provides strong revenue visibility and sets the foundation for improved profitability ahead, coupled with their tender book value of RM1.1 billion with a historical win rate of 15% ~ 20%, this implies that the forward P/E is likely to be lower than current estimates.
Established in 2009, SAG has built a reputation for delivering customised, end-to-end interior fitting-out solutions across commercial, industrial, and residential segments. To date, the Group has successfully completed over 624 projects valued at RM391.6 million between FY2021 and FY2024.
Its client base spans local corporations and multinational companies, and notably includes high-profile projects in the Tun Razak Exchange (TRX), Menara Chin Hin, and a popular retail coffee chain with nationwide presence: all of which underscore SAG’s strong track record in delivering high-specification fit-outs for reputable names.
Revenue has grown substantially from RM73.4 million in FY2021 to RM386.0 million in FY2024, registering a robust 4-year CAGR of 51.3%. Net profit surged even more significantly, from RM2.7 million to RM40.6 million over the same period, supported by operational leverage and improved project margins.
A key competitive advantage for SAG lies in its integrated operations, which include in-house manufacturing of joinery, fixtures, and customised furniture through facilities located in Bandar Baru Bangi and Puchong.
This vertical integration enables better quality control and cost efficiency. The Group is also a CIDB G7 certified contractor, allowing it to bid for projects with no contract value limit, a critical enabler for scaling.
The RM161.2 million raised from the IPO will fund the development of a new centralised corporate office and 50,000 sq ft production facility in Selangor, both targeted for completion by June 2028. These infrastructure investments, alongside branch expansions into Penang and Johor, acquisition of machinery, and working capital injection, reflect SAG’s proactive strategy to meet growing demand and scale operations sustainably.
Post-listing, SAG is expected to maintain a healthy balance sheet with low gearing of just 0.1x and strengthened liquidity, positioning it well to undertake larger and more complex contracts.
In essence, while the IPO comes at a 15.3x trailing P/E, the substantial unbilled order book and clear growth roadmap suggest meaningful forward upside. For investors seeking exposure to a niche but growing segment within Malaysia’s construction and property ecosystem, particularly one anchored by a solid operating history and premium clientele, SAG represents a well-positioned and promising new entrant on Bursa.
Guys, based on my analysis, this is not franchise collab eh, you guys look at announcement, in future no more franchise for others, only for chagee magma lu
Still current sentiment drives the price. If the value isn’t appreciated now, just let it be. As long as the fundamentals are solid and quarterly reports support it, the price will catch up when the market recovers.
These days even quality IPOs don’t fly on Day 1 , need to wait for market confidence and volume to recover. counter like westrvr is a discount after ipo, could be worth considering. Ecoshop might just be the next big IPO. Hopefully it doesn’t flop on day 1, otherwise, everyone will just skip IPOs and wait to buy on first day discounts.
