Find A Rating 
PRESS RELEASES
RAM Ratings assigns AA3(s)/Stable and P1(s) ratings to AME Elite’s Sukuk Wakalah Programmes
Published on 30 Sep 2024.
RAM Ratings has assigned respective AA3(s)/Stable and P1(s) ratings to AME Capital Sdn Bhd’s (AME Capital or the Issuer) proposed RM1.5 bil Islamic Medium-Term Notes Programme (2024/2123) and RM300.0 mil Islamic Commercial Papers Programme (2024/2031) (Sukuk Wakalah Programmes). AME Capital is a funding conduit, wholly owned by AME Elite Consortium Berhad (AME Elite or the Group). As such, the ratings and suffixes reflect AME Elite’s credit profile and its Purchase Undertaking to meet principal and profit obligations under the sukuk programmes.
Listed on Bursa Malaysia since October 2019, AME Elite is an established property and construction group, providing a full suite of industrial park development solutions including design-and-build industrial spaces through its in-house construction and engineering (C&E) arms. In addition, the Group holds a 49.7% stake in its real estate investment trust (AME REIT). This integrated business model enables the Group to deliver quicker time-to-market solutions and afford higher margins. A land-light, build-on-secured-demand strategy provides AME Elite with greater agility to pivot to changing market landscape while keeping a lid on holding costs. The Group is also increasing emphasis on the investment property segment to enhance sustainable cashflow and resilience; this contributed to about 11% of the Group’s overall revenue for 1Q FY March 2025. The Group’s clientele and tenants comprise multinational companies from diverse sectors such as electrical & electronics, pharmaceutical, and across various geographic regions, mitigating concentration risks.
As at end-June 2024, AME Elite’s unbilled property sales stood at RM434.5 mil (including RM210 mil land sale to a data centre operator in 1Q fiscal 2025), with bookings of RM67.9 mil and C&E order book of RM214.9 mil, providing healthy earnings visibility for the near term. Its remaining land bank of about 301.2 acres has an estimated balance gross development value of RM2.38 bil.
AME Elite’s revenue grew at a commendable compounded annual growth rate of 13% in the past seven years, with operating margins of between 17% and 22%, consistently on par with or better than peers’. The Group’s capital management has generally been prudent, with low-leverage and net cash position in the past. Given healthy revenue growth, funds from operations debt coverage (FFODC) and gearing were favourable at respective 0.39 times and 0.16 times as at end-June 2024. Looking ahead, we anticipate both prospective FFODC and gearing to stay rangebound at historical levels, while keeping net cash or near net cash position. Liquidity remains comfortable, with short-term debts of RM160.0 mil amply covered by free cash of about RM310.9 mil over the same period. Undrawn banking lines (approx. RM300 mil), the Group’s listed status and ability to recycle capital via AME REIT afford it further financial flexibility, if required.
Moderating the ratings are intensifying competition for good landbank, particularly in Johor where the Group is largely based, and its focus on the industrial activity segment, which is susceptible to global economic conditions, foreign direct investments and regulatory requirements.
Analytical contacts
Tan Yan Choong
(603) 3385 2502
yanchoong@ram.com.my
Tan Han Nee
(603) 3385 2529
hannee@ram.com.my
Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.
RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.
Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
© Copyright 2024 by RAM Rating Services Berhad
