CPE Technology Bhd is seeking to raise RM179.58 million from its Dec 7, 2023 initial public offering (IPO) to drive its expansion plans. The CEO, Lee Chen Yeong, highlighted the company’s objective to list in order to speed up growth and potential. Lee stated that the majority of the proceeds from the IPO will go towards the construction of new plants and the purchase of machinery and equipment, with the aim of meeting increasing demand both locally and internationally. The company has an unbilled order book of RM69.27 million, indicating strong demand for its services.
CPE Technology Bhd also plans to utilize a portion of the proceeds to purchase raw materials such as stainless steel and aluminum from overseas suppliers. This strategy is aimed at maintaining ample supply and mitigating rising shipping costs due to price fluctuation. The breakdown of the IPO proceeds includes RM69.60 million for land acquisition and new plant construction, RM32.88 million for new machinery and equipment, RM17.45 million to repay bank borrowings, RM46.91 million for working capital, RM1.42 million for capital expenditure, and RM11.32 million for listing expenses.
Based on the issue price of RM1.07 per share and the enlarged issued share capital of 671.31 million shares, the company will have a market capitalization of RM718.31 million. The group stated that Malaysia’s total engineering supporting industry (ESI) was worth RM9.98 billion in 2023, with CPE Technology having a 1.55 percent share of the market, generating revenue of RM145.35 million. Looking ahead, the company emphasized the growth potential of the ESI, projecting a compounded annual growth rate of 8.2 percent to reach RM13.88 billion in 2027, driven by technology advancement and expansion in end-user markets.
Despite headwinds in the semiconductor industry, CPE Technology Bhd remains optimistic about the market’s potential.