ACE Market-bound Radiant to raise RM29m and expand across SE Asia

By DASHVEENJIT KAUR / Pic By ISMAIL CHE RUS

Radiant Globaltech Bhd aims to raise RM29.5 million from its initial public offering (IPO) and targets to expand in Indonesia in the near term.

The retail technology solutions provider which is en route to be listed on the ACE Market on July 24 aims to extend its regional footprint and raise funds to support its expansion plans.

MD Paul Yap (picture) said the group is armed with experience in Vietnam and Cambodia to continue its expansion plans in the Asean region, with a nearterm focus on Indonesia’s blooming retail market.

“We are mindful of the economic growth and rapid urbanisation in South-East Asia, which creates a conducive environment for the retail sector,” he told reporters after Radiant’s prospectus launch in Kuala Lumpur yesterday.

The group IPO entails a public issue of 128.1 million new shares, representing 24.4% of the group’s enlarged issued share capital.

“Of the 128.1 million new shares, 11 million shares will be for application by the Malaysian public and 21.1 million shares allocated for eligible directors, employees and people who have contributed to the success of the group.

“The remaining 96 million shares will be allocated for private placements to selected investors,” Yap said.

He noted that there would also be an offer for sale where 12 million existing shares will be allocated for private placement to selected investors.

At an issue price of 23 sen per share, the IPO would raise RM29.5 million with almost RM20 million earmarked for expansion plans.

Yap said RM11.6 million would be utilised for business and capital expansion for its Malaysia and Vietnam operations, with RM3 million for the group’s retail software business, while RM4.8 million would be for working capital.

“Additionally, another RM6.6 million would be slated for the repayment of bank borrowings, with the remaining RM3.5 million applied towards defraying of listing expenses,” he added.

Radiant also plans to aggressively pursue growth in its in-house retail software management solutions and leveraging on its large customer base of hardware customers to cross-sell the group’s software products.

“We aim to enhance operational efficiency, facilitate seamless retail management processes, and enable efficiency and transparency within the supply chain of retail clientele,” Yap said.

The group incorporated its Vietnam and Cambodia office in 2006 and 2013 respectively.

Since then, the group has secured sales from Parkson Vietnam, AEON Vietnam and AEON Cambodia, among others.

The group’s Vietnam and Cambodia subsidiaries contributed a total of RM10.6 million, or 13.1% of revenue, in the financial year ended Dec 31, 2017 (FY17).

It represented an increase of more than threefold from RM2.9 million in FY15, according to Radiant.

The group also intends to set up a regional sales support team to support the expansion.

Apart from its operations in Vietnam and Cambodia, Radiant also has its distribution offices in Indonesia, the Philippines and Singapore, in collaboration with local partners in the respective countries.

“For one thing, we have secured a reputable customer base ranging from departmental stores and hypermarkets to retail chains and convenience stores, including Giant, Cold Storage, AEON BiG, Parkson, Watsons, Guardian and 99 Speedmart.

“Many of these relationships with notable customers span more than 10 years to date,” he said.

On an industry overview prepared by Smith Zander, Radiant captured a 20% market share of Malaysia’s retail technology solutions industry worth RM404.2 million in 2017.

The retail technology solutions industry in Malaysia stood at RM404.2 million in 2017, and is expected to grow at a compound annual growth rate of 6.26% to RM456.4 million in 2019.

Yap said the group is determined to maintain its market share, if not increase it over the next one year after the listing date.

Radiant currently imports the hardware for its distribution business from its principals in the US, Italy, Japan and Taiwan.

The transactions are usually denominated in US dollars.