Capital markets executive summary | Mon 15 Jan 2024

Capital markets executive summary | Mon 15 Jan 2024

Sik Cheong to list on ACE Market

The company repackages, markets and distributes edible oil and other food products, and distributes lamp oil and other products. The company will issue 66m new shares consisting of 13.3m shares for the Malaysian public via balloting, 4m shares for directors and employees, and 48.7m shares for private placement to selected investors. Shareholders will offer for sale 20m existing shares via private placement to selected investors. The IPO proceeds are for the company’s packaging facility expansion and for working capital. Sik Cheong has more than 500 customers, primarily retailers, wholesalers, hotels, restaurants, catering operators and food manufacturers. It plans to expand to other types of edible oils, especially high oleic soybean oil. TA Securities is the principal adviser, sponsor, underwriter and placement agent.

HE Group sets IPO price at 28 sen

The price values the electrical engineering services provider at a price-earnings multiple of 20 times based on the 1.40 sen earnings per share for FY2022. The company will be listed on the ACE Market on 30 Jan. The IPO entails the issuance of 86.89m new shares or 19.75% of the enlarged shares. HE Group will raise RM24.33m from the IPO, with RM15.13m for working capital, RM3.65m for expanding end-user industry coverage to include data centres and to set up offices in Kedah and Johor, RM3.8m for listing expenses, and RM1.75m for capital expenditure. The company’s expansion targets data centres in Johor. It will also expand its in-house capabilities to be an integrated mechanical, electrical and process engineering services provider. HE Group designs, supplies, installs, tests and commissions power distribution systems of various voltage levels, serving multinational companies in Malaysia, especially semiconductors, medical devices and electronic products. At 15 Dec 2023, the order book was RM211.9m to last until end-2024. It has ongoing projects with RM423m total contract value for the provision of power distribution systems, other building system works, hook-up and retrofitting works for end premises. Profit after tax was RM1.7m in FY ended Aug 2020, RM6.17m in FY2022, RM7.26m in FY2023. Revenue was RM31.39m in FY2020, RM107.57m in FY2022, and RM138.58m in FY2023. The semiconductor sector contributed 77.2% of revenue, medical devices 16.1%, and others 6.7%. Largest shareholder Hexatech Energy Consolidated Sdn Bhd’s shareholding will fall to 24.6% post-IPO. Applications are open until 5pm on 18 Jan. Alliance Islamic Bank is the principal adviser, sponsor, sole underwriter and placement agent.
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Malaysia Steel Works gets RM84m financing from AmBank

The bank announced that the facilities will help the company transform into a sustainable producer of steel bars and billets with ultra-low greenhouse gas emissions. Masteel is the first ultra-low-emission steel manufacturer in Malaysia listed on the FTSE4Good Bursa Malaysia Index with a rating of 4 out of 4 stars in 2023. AmBank says that it is committed to environmental, social and governance (ESG) principles that include sustainable development, especially the integration of sustainability into business strategies. Masteel aims to decarbonise the construction sector despite the steel industry being hard-to-abate. The company was the Gold Winner for the most improved performance over 3 years on 6 Nov at The Edge Malaysia ESG Awards 2023.

BlackRock buys Global Infrastructure Partners for USD12.5b

The deal will turn the world’s largest asset manager into one of the biggest players in alternative assets and private markets with an infrastructure investing platform managing over USD150b in combined assets. BlackRock will pay USD3b cash and issue 12m shares. Global Infrastructure Partners was set up in 2006 and manages more than USD100b in assets including the UK’s Gatwick airport, the Port of Melbourne and offshore wind projects. BlackRock likes infrastructure as a long-term investment given the structural shifts reshaping the global economy. The combined infrastructure platform will deliver opportunities for its global clients.

Hillhouse and Mitsui among final bidders for Eu Yan Sang

The Singapore-headquartered traditional Chinese medicine (TCM) chain’s shareholders led by Temasek-owned asset manager Tower Capital Asia will hold management presentations with the bidders this week. Hillhouse is an investment firm founded by China-born Lei Zhang. Both Hillhouse and Japan’s Mitsui & Co are existing investors of Eu Yan Sang. There is also an unidentified 3rd bidder. Final binding bids are due by Feb before CNY and the deal could fetch over USD700m. Eu Yan Sang has more than 170 retail outlets and 30 TCM clinics in mainland China, Hong Kong, Macau, Malaysia and Singapore. Eu Yan Sang was previously listed on the SGX before Tower Capital’s consortium and the CEO privatised the company in 2016 at about USD196m.