Malaysia-based automotive company MeGroup has priced its initial public offering (IPO) at $0.23 per share ahead of its debut on the Singapore Exchange’s Catalist board.
The IPO will raise net proceeds of $2.4 million through the sale of 16.5 million new shares, comprising a public offer of 1.5 million shares and placement tranche of 15 million shares. The net proceeds will be used for both organic and inorganic business expansions ($1.8 million) as well as for working capital purposes ($0.6 million).
The public offer closes at noon on 29 October 2018, with trading to commence at 9am on 31 October 2018. CIMB Bank is the sponsor and issue manager for the IPO.
MeGroup operates in two business segments, namely Manufacturing and Dealership. The group manufactures noise, vibration and harshness (NVH) components and non-NVH components used primarily for the automotive industry in Malaysia. It owns three plants in Malaysia with a Main Manufacturing Plant and a Thermobonded Felt Plant in Klang Valley, Selangor as well as an Assembly Line in Pulau Pinang.
As for the dealership business, MeGroup owns 3S and 4S automobile dealerships for the sale of new automobiles under the Honda, Mazda and Peugeot brands. Not only that, Johnson Controls Hitachi appointed MeGroup as the approved supplier to supply NVH components for their heating, ventilation and air-conditioning (HVAC) products in June 2018.
In FY18, revenue jumped 65.6% to RM148.8 million largely attributed to higher sales of automobiles due to new models of automobiles from the Mazda and Peugeot dealership and additional volume contribution from new Honda and Peugeot dealership. Owing to better top line performances, the net profit also improved from RM49,700 to RM8.9 million.
As at 31 March 2018, total equity stood at RM30.5 million, which translates into pre-placement net asset value per share of 29.90 sen, which will rise to 31.82 sen after adjusting for the net proceeds.
Currently, MeGroup has no fixed dividend policy and has not distributed any dividends since its incorporation on 7 February 2018.
Wong Cheong Chee is the executive chairman and CEO of the MeGroup.