Capital markets executive summary | Wed 13 Dec 2023

Capital markets executive summary | Wed 13 Dec 2023

Ocean Fresh to list on ACE Market

The frozen seafood products producer will offer 50.05m shares or 23.81% of its enlarged issued shares. 10.51m shares are for the Malaysian public, half for bumiputra investors. 1.71m shares are for eligible parties and 37.83m shares for private placement to selected investors. The proceeds will be used to set up a new cold storage facility and for working capital. The company’s serves international customers in Turkiye, China, Thailand, Vietnam, Japan, Indonesia, the Philippines, Singapore, Korea, Italy, Portugal, the US and Australia. Net profit grew from RM2.4m in FY2020 to RM4.02m in FY2021 to RM5.58m in FY2022. Revenue was RM94.06m in FY2020, RM158.47m in FY2021 and RM156.33m in FY2022. KAF is the principal adviser, sponsor, underwriter and placement agent.

Yinson’s perpetual sukuk programme assigned A- preliminary rating

MARC Ratings assigned the rating to the RM1b subordinated perpetual sukuk programme, 2 notches down from the A+ rating on the RM1b senior sukuk programme. Total borrowings will peak at RM21b in FY2026. Gross recourse debt-to-equity (DE) ratio for FY2024 is 1.64 times. The release of guarantees for FPSOs Anna Nery and Maria Quiteria should bring the ratio below 1.5 times by end-2025. Proceeds from the RM640m perpetual sukuk issuance are mainly for refinancing the USD120m unrated perpetual bonds, and will be accorded 50% equity credit given the 5-year call period. Order book grew from USD20.4b in Apr 2023 to USD22.2b. The charter contracts have an average 15.7 year term. Recurring revenue increased 22.9% year-on-year to RM1b in 1HFY2024 and should grow after FPSOs Atlanta, Maria Quiteria and Agogo, with higher daily charter rates, are deployed in 4Q2024 and 4Q2025. Cash flow from operations rose to RM2.7b. Available cash shrunk from RM1.5b in FY2023 to RM1.2b to fund construction. Yinson will not take on additional FPSO projects in the near term. Separately, RAM Ratings assigned a A3 rating to the same programme. Revenue more than doubled from RM2.59b in 1H FY Jan 2023 to RM6.09b in 1H FY Jan 2024. Total debts increased from RM11.48b at end-Jan 2023 to RM12.95b at end-Jul 2023 to fund projects. Gearing excluding non-recourse loans strengthened from 1.74 times to 1.26 times. Adjusted operating cash flow debt coverage should remain 0.05 times up to FY2025. The counter closed at RM2.48.
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Sarawak Energy’s AAA rating affirmed

RAM Ratings affirmed the rating of the Sarawak state-owned company’s RM15b sukuk musharakah programme (2011/2036). It is Sarawak’s sole power utility company and a key facilitator of the Sarawak Corridor of Renewable Energy (SCORE), and should receive extraordinary government support when needed. Revenue jumped 15.1% year-on-year to RM6.96b in FY2022. Operating profit before depreciation, interest and tax (OPBDIT) gained 19.7% to RM3.7b. Net profit more than trebled from RM0.82b in FY2021 to RM2.73b, although it normalised to RM0.80b in 1H2023. Funds from operations debt coverage (FFODC) weakened from 0.23 times at end-Dec 2022 to 0.21 times at end-Jun 2023. Gearing improved from 1.20 times to 1.14 times. Average capital and investment commitments should grow from RM1.79b in FY2022 to RM4.35b in 2024-2026. Average projected FFODC is 0.16 times in FY2024-2026 while average projected gearing is 1.17 times. Sarawak Energy’s revenue is heavily contributed by bulk customers, especially Press Metal (rated AA2).

Kucingko plans ACE Market listing

The 2D animation production house is offering 100m new shares, with 25m shares for the Malaysian public, 10m shares for directors and employees and 65m shares for private placement to selected investors. The shareholders are offering 100m existing shares to selected investors. The IPO proceeds will finance capital expansion and working capital. The company has 21 years’ experience with customers in 8 markets in North America, Asia Pacific and Europe. The company earns revenue from the 2D animation production services entirely from foreign countries. Kenanga is the principal adviser, sponsor, underwriter and placement agent.

Changxin Memory Technologies calls off IPO

The Chinese chipmaker planned to file for an IPO on Shanghai’s STAR board this year, but decided to postpone because of volatile market conditions. It will instead look for investors for a private placement exercise to raise funds at a CNY140b (USD19.5b) valuation. The financing round will allow the company to expand capacity ahead of the global tech rebound in 2024. The Hefei-based company, one of China’s biggest manufacturers of memory chips, does not have a target amount because it only just begun to engage investors.