A committed step towards rebalancing family office’s portfolio via ESG investing
KUALA LUMPUR, 4 JAN 2023 – Jakel emerges as the single largest shareholder with 27.33% direct & indirect shareholdings in Cypark Resources Berhad (“Cypark”), following its placement of 176.65 million new shares for RM67.1million. This strategic investment by the family office of Jakel Group, Jakel Capital Sdn Bhd (“Jakel Capital”), was undertaken via private placement exercise initiated by Cypark in November 2022.
This strategic investment marks an important milestone in the enterprising journey of Jakel Group to strategically rebalance its investment exposure in existing textile trading & wholesale and property development businesses with the incorporation of environmental, social & governance (ESG) investing into its portfolio.
“Investing in Cypark provides Jakel Group with a timely opportunity to play an active role in shaping the ESG issues in the country. For Jakel Group to remain competitive in future, we are obliged to embrace and prioritise the ESG principles in everything that we do, towards providing greener practices, products and services. Through Cypark, we
now have a platform and a role to play to advance Malaysia’s climate and sustainability agenda in achieving environmental sustainability by 2030,” says Muhammad Ashraf, the Chief Executive Officer of Jakel Capital.
Relative to its peers that are currently trading at more than 20x PE ratio (PER), Cypark is currently traded at an attractive valuation of approximately 8.5x PER supported by its ongoing concession assets that provide certainty to its revenue generations for the years to come. It currently owns and/or operates close to 150MW of renewable energy assets, and with multiple construction of new power plants due for completion & approval, this capacity will increase to more than 400MW by mid-2023. As at 31 October 2022, Cypark’s net assets attributable to owners of company stood at RM2.14 per share.
“Cypark remains fundamentally strong and the recent private placement exercise provides itself with an opportunity to improve its gearing and optimise its capital structure. We believe its current market capitalisation provides us with comfortable margin of safety to cushion any potential downside risks identified, yet mindful of cash flows requirements as an infrastructure/utility company. Furthermore, the technical expertise of Cypark’s construction & engineering arm and its past involvement in landmark projects are worth leveraging for upcoming infrastructure jobs in the country.”
“Moving forward, as Cypark is now an associate company of Jakel Capital, we are
committed to investing in the company for the long haul and we remain bullish on the growth of its clean energy industry,” he added.
The acquisition of shares by Jakel Capital into Cypark through the private placement exercise would provide the latter with infusion of capital; RM50million of which earmarked for the 98MW solar photovoltaic projects in Kelantan slated for completion in May 2023 and the remaining sum for the working capital requirements of the 20MW integrated waste-to-energy plant in Negeri Sembilan; addressing earlier concerns on project cash flows and delays.
Jakel Group In 2023
Throughout year 2022, Jakel Group had deployed approximately RM100million of its funds towards investing in the local equity markets, both private and public.
Stepping into year 2023, it remains positive towards domestic markets by allocating additional RM150million of Jakel Group’s internally generated funds to Jakel Capital to invest in target sectors namely healthcare, food security, technology & smart manufacturing as well as green & sustainable industries.
Muhammad Ashraf remains bullish with the Malaysian economy. “Despite the economic headwinds and challenging outlook that economists and research houses suggest, we believe year 2023 would still present us with attractive investment opportunities, particularly in recession-proof industries with stable returns.”
“As part of our social responsibility to encourage entrepreneurship amongst local talents, Jakel Capital dedicates RM10million out of the 2023 investment allocation to invest in high potential start-ups and SMEs as enablers for these enterprises to reach the desired growth potentials and optimised capital structure,” he added.
About Jakel Capital Sdn Bhd
Jakel Capital Sdn Bhd is the investment arm of Jakel Group and the family office of the Jakel family. With RM250million allocated funds, Jakel Capital performs direct investment into companies across diversified sectors and various business lifecycles with sustainable, scaleable and shariah-compliant attributes. It considers investments from all sectors that presents attractive returns and prospects but guided by its current investment strategy that targets healthcare, food security, technology & smart manufacturing as well as green industries.
About Cypark Resources Berhad
Cypark Resources Berhad is a public listed company on the Main Market Bursa Malaysia since 2010. Cypark is a multiple award-winning Malaysian homegrown corporation and has been the country’s leading renewable energy & green technology provider within the ESG segment. Over the years, it has built its reputation as Malaysia’s pioneering developer and provider in integrated renewable energy, construction and engineering, green technology and environmental services, and waste management and waste-to-energy.