Ecomate Raises Production Capacity For Increased Furniture Demand

Ecomate Holdings Bhd has successfully launched its prospectus via a virtual launch event today in conjunction with the Group’s upcoming listing via an Initial Public Offering (IPO) exercise on the ACE Market of Bursa Malaysia Securities Bhd.

Ecomate has recorded tremendous growth in its financial performance since its inception. Revenue and profit after tax and non-controlling interest (PATNCI) grew at an astounding compounded annual growth rate (CAGR) of 52.8% and 59.7%, respectively, from Financial Year ended February 2019 (FY2019) to FY2021. The revenue and PATNCI stood at RM56.3 million and RM8.5 million respectively for FY2021.  

As Ecomate embarks on the next phase of growth, it targets to raise approximately RM16.2 million from the IPO exercise, which involves a public issuance of 49.0 million new ordinary shares priced at RM0.33 per share, to partly fund its expansion plans. 

“In order to capture a bigger share of the growing RTA furniture markets, we will be utilising part of the proceeds raised from the IPO exercise to acquire machinery and equipment to enhance our automation processes and increase our production capacity, which is currently near full utilisation. In addition, a portion of the proceeds will go toward the construction of a new factory and hostel in Muar Furniture Park,” adds Jason Koh, Managing Director of Ecomate.

The group is upbeat on its outlook moving forward as it accelerates its expansion plans to keep up with the robust order flows, especially via e-commerce sales channels for RTA furniture. On the corporate front, the group’s operations are now back on full scale following the full vaccination of its workforce. Hence, the group is currently kept busy fulfilling the sizable order backlogs to catch up on the lost time during the Full Movement Control Order. 

Ecomate will raise approximately RM16.2 million from the IPO exercise, with the planned utilisation of proceeds as follows: 

• RM6.0 million (37.1%) for the acquisition of machinery and equipment;

• RM2.0 million (12.4%) for the construction of its third factory which is expected to house 3 additional production lines and 1 block of the four-storey detached hostel;

• RM5.3 million (32.6%) for the purchase of raw materials to support production activities; and 

• The balance RM2.9 million (17.9%) to defray estimated listing expenses. 

Ecomate’s IPO entails a public issue of 49.0 million new shares, representing approximately 14.0% of the enlarged share capital, along with an offer for sale of 30.00 million existing shares in the following manner:  

• Public issue of 49.00 million new Shares: – 

▪ 17.50 million new Shares available for the Malaysian Public; 

▪ 8.75 million new Shares available for the eligible Directors, employees and persons who have contributed to the success of our Group; and ▪ 22.75 million new Shares by way private placement to selected investors  

• Offer for sale of 30.00 million existing shares by way of the private placement to selected investors. 

Pursuant to the launch of Ecomate’s prospectus, applications for the public issue are open from today and will close on October 25 at 5:00 p.m. The group is scheduled to be listed on the ACE Market of Bursa Securities on November 8. 

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