KUALA LUMPUR (Dec 5): Shares of Ajiya Bhd climbed as much as 7.7% today, after its managing director expects the company to recover earnings traction through regrouping and banking on its new integrated building system (IBS).

At 11.49am, Ajiya rose 4.5 sen to trade at 63 sen, with 1.28 million shares done, for a market capitalisation of RM191.89 million. In comparison, its 200-day average trading volume is 536,109 shares.

In an interview with The Edge Financial Daily, Ajiya managing director and founder Datuk Chan Wah Kiang said the group is now regrouping and banking on the adoption of its new IBS to recover the earnings traction it has lost.

Though the system, dubbed the Ajiya Green Integrated Building System (AGIBS), is new — it was launched just last year — Chan believes it is a very competitive system that should help the group improve its earnings performance in the financial year ending Nov 30, 2017 (FY17).

"With the contribution of the AGIBS, we expect our earnings in FY17 to at least match the one in FY15, which is about RM22 million, if not better. But with a challenging environment, we dare not be too optimistic," he said.

With the AGIBS, Chan said Ajiya is among 15 companies shortlisted by the Public Works Department (JKR) to supply the AGIBS to contractors to build about 100 schools in Peninsular Malaysia, though he did not reveal the value of the job.

Its 9MFY16 net profit came in at RM9.46 million or 9.51 sen per share against RM16.76 million or 24.21 sen per share previously, as revenue fell 7% to RM294.76 million from RM318.5 million.

Meanwhile, on the poor share price performance of Ajiya, Chan, who is a substantial shareholder of the company with a 28.8% stake, said the selldown was by institutional investors.

On that note, Chan said he is still accumulating Ajiya shares, saying the current share price is "ridiculously low" and "undervalued".

Year to date, the counter has declined more than 42%.