By SHAHEERA AZNAM SHAH / Pic By TMR
Mi Equipment Holdings Bhd plans to expand to the European region with its improved production capacity derived from its two additional manufacturing facilities.
Group CEO Oh Kuang Eng said the manufacturer of the wafer level chip scale packaging (WLCSP) for sorting machines had delivered a small quantity of equipment to several semiconductor firms in Germany.
“There are quite a number of established European players in the semiconductor sector, and therefore is a market we expect to engage further into.
“Although we only delivered a small number of machines to Germany, it was a good opportunity for us to learn about the latest semi-conductor technology, as well as the packaging process for that particular market,” he said after the listing of Mi Equipment on the Main Market yesterday.
Oh, however, said the company has yet to determine the specific timeline to venture out of its current market segment.
Mi Equipment raised RM190.89 million through the listing exercise, of which RM140 million, or 74%, of the proceeds will be utilised for the construction of two new factories in Bayan Lepas and Batu Kawan, Penang.
The two new facilities combined are expected to increase its current monthly capacity by sevenfold — churning out 90 machines by 2020.
“Our business state is cyclical and not according to the normal manufacturing production formula. The current factory capacity is at 12 machines in a single production per month,” said Oh.
The Bayan Lepas factory is slated for completion in the first quarter of 2019 (1Q19) and will be operational in 2Q19, while the Batu Kawan factory is expected to be completed by 3Q20.
About RM36.76 million will be utilised as working capital, while the remaining RM14.1 million for research and development.
Oh said at present, the firm develops sorting machines’ WLCSP for the South-East Asian, North-East Asian, as well as North Atlantic regions.
According to Oh, the North-East Asian region remains the heaviest contributor to revenue and accounts for 60%-70% of its total earnings.
“A major portion of the wafer level chip packaging derived from the supply chain is concentrated in North-East Asia.
“We believe the region will generate at least 65% of our revenue, while 25% would be from South-East Asia and the remaining 10% from North Atlantic,” he said.
Mi Equipment opened at RM1.39, a three sen discount over its offer price of RM1.42 with a volume of 2.46 million shares traded. The stock closed its maiden trading day up 12 sen at RM1.54.
The listing involved a total offering of 152.95 million ordinary shares, with a public issue of 134.43 million new shares and an offer for sale of 18.52 million shares at RM1.42.
The company’s revenue and net profit saw an annual growth rate of 32.6% and 47.7% respectively, over four years between 2014 and 2017.
Mi Equipment has a dividend policy payout rate of at least 20% of net profit.