Capital markets executive summary | Mon 18 Sep 2023

Capital markets executive summary | Mon 18 Sep 2023

Alpha IVF plans listing on ACE Market

The fertility care specialist will issue 364.5m new shares or 7.5% of the enlarged shares. 1.09b existing shares or 22.5% will be offered for sale. 48.6m new shares are for bumiputra and other Malaysian public. 24.3m new shares are for eligible persons. 243m new shares are for institutional investors. 607.5m existing shares are for bumiputra investors approved by the Ministry of Investment, Trade and Industry. 486m existing shares are for institutional and selected investors. The company provides assisted reproductive services in Malaysia and Singapore, diagnostics, testing and screening procedures, and cryopreservation of eggs, sperm and embryos. It has 2 specialist centres in Malaysia and 1 in Singapore with customers from Malaysia, Singapore, Indonesia and China. The proceeds will also be used for new medical centres, upgrade existing ones, research and development, working capital and listing expenses. Net profit was RM3.46m in FYE ended Feb 2020, RM2.31m (FY2021), RM22.98m (FY2022) and RM43.4m (FY2023). Revenue was RM68.96m in FY2020, RM62.06m (FY2021), RM91.09m (FY2022) and RM99.56m (FY2023). Group managing director Datuk Dr Colin Lee Soon Soo owns 61.68% which will be reduced to 43.16%. AmInvestment Bank is the principal adviser, sponsor, lead placement agent and managing underwriter.

Cenergi’s rating upgraded to AA3

RAM Ratings upgraded Cenergi SEA Berhad’s long-term corporate credit rating and the issue rating of the RM1.5b senior sukuk from A1 to AA3, while the short-term rating remained P1. The subordinated perpetual sukuk programme was upgraded from A2 to A3. Cenergi’s new parent, UEM Group Berhad, is Khazanah’s flagship vehicle driving the green economy. Cenergi is the biggest grid-connected non-miller biogas provider under Malaysia’s feed-in tariff scheme with a 12.8% market share at end-Aug 2023. The company also has 45MW solar farms and 14.1MWp rooftop installations. It won a 29.99MW solar project under the government’s corporate green power programme. In FY2022, operating revenue grew 29% year-on-year to RM60m, but finance costs caused adjusted pre-tax profit to only break even. RAM’s sensitised cashflow projection shows that gearing for FY2023-2025 will average 1.23 times (end-Dec 2022: 1.51 times) whereas funds from operations debt coverage will be 0.11 times (end-Dec 2022: 0.12 times). Operating profit before depreciation, interest and tax margin will be 39%.
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BNP Paribas Malaysia’s AA1 and P1 ratings affirmed

RAM Ratings affirmed the bank’s financial institution ratings based on demonstrated support from parent BNP Paribas SA, a globally systemically important banks, in providing funds and capital. The Asia Pacific region, which contributes 8% of the group’s aggregate revenue, is earmarked for growth and investment. BNP Paribas Malaysia leverages on the group’s international network and wholesale banking expertise. Derivative transactions and market making activities cause earnings to be volatile. Pre-tax profit plunged to RM1.3m and return on risk-weighted assets to 0.03% in FY2021 due to valuation losses but rebounded to RM66.8m and 1.65% in FY2022 when covid restrictions were relaxed and market volatility bumped up trading volumes. Trading activity continued into 1Q2023 resulting in pre-tax profit of RM23.8m turning around from RM6.4m pre-tax loss in 1Q2022. Common equity tier-1 capital ratio of 20.5% at end-Mar 2023.

Evergreen Max Cash Capital IPO oversubscribed 53 times

The pawn broker received 14,568 applications for 3.01b shares worth RM722.66m from the Malaysian public. Bumiputras made 4,596 applications for 656.83m shares or 22.58 times oversubscribed while the other public made 9,972 applications for 2.35b shares or 83.53 times oversubscribed. 27.9m pink form shares were fully subscribed. 44.6m new shares to selected investors and 139.4m new shares to bumiputra investors approved by the Ministry of Investment, Trade and Industry were fully placed out. The 43m existing shares offered for sale were fully taken up. Evergreen was set up in 2012 and has 22 pawnshops in Kuala Lumpur, Selangor, Negeri Sembilan and Pahang. The RM64.2m IPO proceeds will be used as capital for its pawnbroking business and for opening new outlets. The company will be listed on the ACE Market on 26 Sep. Mercury Securities is the principal adviser, sponsor, underwriter and placement agent.

South Korean startup Panmnesia valued at USD81.4m

The company raised USD12.5m from Daekyo Investment, SL Investment, Smilegate Investment, GNTech Venture Capital, Time Works Investment, Yuanta Investment and Quantum Ventures Korea in a seed round. Panmnesia develops intellectual property around compute express link (CXL) technology, which enables big data centre operators to pool devices such as artificial intelligence (AI) accelerator chips, processors and memory. CXL technology resolves memory bottlenecks when crunching data for AI applications. The company’s technology may be of interest to chip design software makers. The South Korean government will spend USD800m in the next 5 years to increase the negligible share of Korean AI chips in domestic data centres to 80% by 2030.