Edelteq Holdings Berhad has successfully launched its prospectus in conjunction with its upcoming initial public offering on the ACE Market of Bursa Malaysia Securities Berhad.
The IC assembly and test process support company’s expertise and track record in providing quality products and services has enabled the group to secure multinational integrated device manufacturers and outsourced semiconductor assembly and test companies as its customers. These clients are geographically diverse and are located in various countries including Malaysia, Singapore, Thailand, China, and the United States.
Executive Director and Group Chief Executive Officer of Edelteq, Mr. Chin Yong Keong, said, “The IPO is a crucial part of our growth plans as we expand our operations to capitalise on the emerging prospects in the semiconductor industry. With the funds raised from the IPO, we will be able to enhance our capabilities and improve our portfolio of products and services offered, thus increasing our competitiveness and market share.”
Commenting on the Group’s future plans, Mr. Chin added, “In order to meet the growing market demand, we are expanding our production capacity with the construction of a new factory in Batu Kawan, Penang which is expected to be operational in March 2024.”
“Moving forward, we will be developing new products and services for our automated test equipment (“ATE”) and IC assembly and test consumables. Moreover, through the enhancement of our factory automation solutions, we aim to capture a wider customer base amidst the growing trend for factory automation and the shift towards automated processes.”
Edelteq is expected to raise a total of RM24.00 million from the IPO, of which RM3.7 million has been earmarked for construction of the new factory in Batu Kawan and RM3.1 million for research and development activities. RM3.4 million will be utilised for working capital, RM10.3 million to repay bank borrowings and the balance RM3.6 million to defray listing expenses.
Edelteq’s IPO exercise encompasses a public issuance of 100.0 million new shares, representing 18.8% of its enlarged share capital, as well as an offer for sale of 43.2 million existing shares, representing 8.1% of the enlarged shares by way of private placement to selected investors.
Out of the 100.0 million new shares, 26.6 million will be made available to the Malaysian public via balloting; 10.0 million shares to its eligible employees and persons who have contributed to the success of the Group (“Pink Form Allocations”); while the remaining 63.4 million shares are reserved for selected investors through private placement.
Based on an issue price of RM0.24 per share and an enlarged share capital of 532.5 million shares, Edelteq will have a market capitalisation of RM127.81 million upon listing.
In the financial year ended 31 December 2022 (“FYE 2022”), Edelteq recorded a profit after tax of RM5.4 million on a revenue of RM24.4 million. Its revenue and PAT grew at a compound annual growth rate of (“CAGR”) of 25.3% and 114.4% respectively, for the financial years ended FYE 2019 to FYE 2022.
In FYE 2022, 77.6% of revenue was generated in Malaysia, while the remaining 22.4% was contributed by overseas markets.
In terms of dividend policy, Edelteq has set a target to distribute up to 20% of its annual profit after tax attributable to the shareholders of the Group.
Following the prospectus launch, applications for the public issue are now open and will close on 17 May 2023 at 5:00 p.m. The Group is scheduled to be listed on the ACE Market of Bursa Securities on 30 May 2023.
UOB Kay Hian Securities (M) Sdn Bhd is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
