ACE Market-bound Edelteq targets RM24mil in proceeds from IPO

KUALA LUMPUR: Edelteq Holdings Bhd, en route to a listing on the ACE Market of Bursa Malaysia, expects to raise RM24mil from its initial public offering (IPO) as it seeks to expand its production capabilities.

The company, which is an engineering support provider for integrated circuit assembly and test process in the semiconductor industry, said at the launch of its IPO prospectus today it planned on constructing a new factory in Batu Kawan, Penang, expected to be operational in March 2024.

Edelteq will allocate RM3.7mil of the IPO proceeds to fund the construction of the factory, while RM3.1mil will go towards research and development activities.

Of the remaining proceeds, RM3.4mil will be utilised for working capital, RM10.3mil to repay bank borrowings and RM3.6mil to defray listing expenses.

“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,” said Edelteq executive director and group CEO Chin Yong Keong in a statement.

Edelteq’s IPO exercise comprises a public issuance of 100 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 million shares to its eligible employees and persons who have contributed to the success of the group, while the remaining 63.4 million shares will be reserved for selected investors through private placement.

Based on an issue price of 24 sen per share and an enlarged share capital of 532.5 million shares, Edelteq will have a market capitalisation of RM127.81mil upon listing.

In the financial year ended Dec 31, 2022, Edelteq recorded a profit after tax (PAT) of RM5.4mil on revenue of RM24.4mil.

Its revenue and PAT grew at a compound annual growth rate of (CAGR) of 25.3% and 114.4% respectively in FY2019-22.

According to the company, 77.6% of revenue was generated in Malaysia in FY22, 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 May 17, 2023 at 5pm.

The group is scheduled to be listed on the ACE Market on May 30, 2023.

UOB Kay Hian Securities (M) Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.

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