Capital markets executive summary | Mon 17 Jul 2023

Capital markets executive summary | Mon 17 Jul 2023

Daythree IPO oversubscribed 129 times

Daythree Digital Berhad will be listed on the ACE Market on 26 Jul. It received 24,053 applications for 3.12b shares for the 24m new shares offered to the public. The listing entails the issuance of 110.4m new shares at 30 sen plus an offer for sale of 12m existing shares by the shareholders. The bumiputra portion was oversubscribed by 113 times with a total of 13,004 applicants while the remaining public portion had an oversubscription rate of 146 times. The 12m new shares for directors and employees were fully subscribed. Shares offered through private placement were also completely sold. With the enlarged 480m shares, Daythree will have a market capitalisation of RM144m upon listing. A portion of the IPO proceeds will be used to recruit industry experts and set up a larger digital transformation team to continuously improve the company’s in-house digital tools to capture growth opportunities.

AEON Credit Service and AEON Financial Services in JV for digital Islamic bank

The Malaysian company and Tokyo-listed company entered into a shareholders’ agreement to invest RM175m each in ACS Digital Berhad, which was incorporated on 19 Jul 2022. ACS Digital will begin operations within 24 months from 8 April 2022, subject to fulfilling licensing conditions in Bank Negara Malaysia’s approval letter. Amongst others, the Ministry of Finance insists that at least 30% shareholding must be held by Malaysians, with priority to bumiputras. Within 5 years of commencement, both parties may raise the share capital to RM550m. AEON Credit Service expects ACS Digital to have access to lower cost of funds via the deposits from AEON Financial Services’ customers. The prospects of ACS Digital are tied to the reception by the underserved and unserved segment, for example, the gig economy workers and rural residents. AEON Credit Service closed at RM11.34.

Adventa to raise RM46m from rights issue

The renounceable rights issue involves issuing 152.79m new shares on the basis of 1 rights share for every 1 existing share. As at 4 Jul 2023, Adventa’s share capital is RM57.68m. The illustrative issue price of 30 sen is at a 28.94%-37.26% discount to the theoretical ex-rights price. Gross proceeds will range from a minimum of RM17.71m to a maximum of RM45.84m. The healthcare supplies and equipment provider will use RM30m for the construction of a manufacturing facility in Indonesia to manufacture disposable medical devices and to purchase plant and machinery. Construction will be undertaken from 2H2023 to 2H2024. The balance of the proceeds will be used for working capital and to repay bank borrowings, which at 4 Jul was RM9.49m. Executive director Low Chin Guan, who currently holds 59.04m shares or 38.64%, provided his irrevocable and unconditional undertaking to subscribe in full for his rights shares entitlement. Low and Low Lea Kwan, who is a person-acting-in-concert, collectively hold 42.25%. Adventa is seeking an exemption for them from the obligation to undertake a mandatory general offer. UOB Kay Hian is the principal adviser for the exercise which is expected to be completed in 4Q2023. The counter closed at 54 sen.

PLS Plantations and Agrofresh to develop banana plantation

The companies will form a 60:40 joint venture, PLS Agrofresh Sdn Bhd, which will grow an initial 500 acres increasing to 2,500 acres over 3 years. Agrofresh Management Sdn Bhd exports and imports tropical and subtropical fruits. The joint venture envisages a modern operation which will include research and development, fertiliser production, tissue culture, product development and international partnerships. The company is assembling a team of experienced technical experts specialising in the development and operation of banana plantations with international standard from the Philippines. PLS Plantations closed at 95 sen.

China automobile shipments is the bright spot in the economy

Despite China’s exports falling 12.4% in Jun year-on-year, automobile exports jumped 75.7% in 1H2023. The country shipped out 2.14m automobiles, with new energy vehicles comprising 534k units, soaring 160% from 1H2022. Passenger vehicle exports surged 88.4% to 1.78m units, whereas commercial vehicle exports climbed 31.9% to 361k units. The momentum is strong with Jun automobile exports of 382k units, up 53.2% from Jun 2022. Total automobile exports were more than 2m units in 2021 and 3m units in 2022.