CPE Technology Bhd is planning to raise RM179.58 million from an initial public offering (IPO) on December 7, 2023. The company’s main goal for the IPO is to support its expansion plans. According to CEO Lee Chen Yeong, most of the capital raised will be used to construct new plants, purchase machinery and equipment, and acquire raw materials to optimize production.
One of the key uses of the proceeds from the IPO will be to acquire industrial land and construct new plants, as well as to purchase new machinery and equipment. Additionally, part of the funds will be allocated to repay bank borrowings, provide working capital, cover capital expenditure, and pay for the expenses associated with the listing process. It is expected that at an issue price of RM1.07 per share and an enlarged issued share capital of 671.31 million shares, the company will have a market capitalization of RM718.31 million.
The prospectus states that Malaysia’s total engineering support industry (ESI) was worth RM9.98 billion in 2023, up from RM9.37 billion in 2022. CPE Technology held a 1.55% share of the 2022 market, generating revenue of RM145.35 million. The company anticipates that the ESI will experience a compounded annual growth rate of 8.2%, reaching RM13.88 billion in 2027 despite headwinds in the semiconductor industry, CPE Technology remains optimistic about the market’s potential