ATech to raise RM105m from IPO to strengthen its EMS business


AURELIUS Technologies Bhd (ATech) is seeking to raise RM104.73 million from its listing exercise on Bursa Malaysia Bhd’s Main Market on Dec 16, mainly to fund its expansion plans. 

The listing exercise involves the issuance of up to 103.87 million new shares comprising a public issue of 77.01 million shares and an offer for sale of up to 26.86 million shares. 

The institutional offering of up to 80.96 million shares represents 22.60% of the enlarged issued shares. 

The retail offering of up to 22.91 million shares, representing 6.4% of the enlarged issued shares, will be offered at a retail price of RM1.36 per share, according to the group’s prospectus launched yesterday. 

ATech ED and CEO Lee Chong Yeow said the IPO listing exercise will enable the group to speed up the execution plan to grow, strengthen and leverage its core competency of providing electronic manufacturing services (EMS) for industrial electronics products as well as continue its expansion into the production of Internet of Things (IoT) modules that the company started offering in early 2020. 

He added that the group is expanding its production facilities with the construction of a new factory adjacent to its existing plant in Kulim Hi-Tech Park in Kedah. 

“The new factory will enable us to add floor space to grow the semiconductor component modules production, to cater for lithium-ion battery pack production and our existing EMS operations. 

“We will have a total of 15 surface-mount technology (SMT) lines by the end of 2023 from both the new factory and additions to the current factory. These new SMT lines will increase our annual capacity by 198.7% for the financial year ending Jan 31, 2024 (FY24) from FY21 to meet the expected increase in demand from our customers,” he said. 

ATech has earmarked RM40 million from the proceeds of the IPO for the purchase of new machinery and equipment. 

The group will allocate RM29.52 million for repayment of borrowings and use RM28.13 million for working capital while RM7.08 million will go to pay listing expenses. 

Maybank Investment Bank Bhd is the principal adviser, sole book runner and sole underwriter of the exercise. 

Maybank Kim Eng CEO Ami Moris said the premium valuation for ATech is justifiable due to the group’s growth prospect. 

She noted as a direct IoT proxy, ATech is well-positioned for sustainable accelerated growth as the demand for IoT terminal connections is expected to hit 23.7 billion by 2026. 

“Our conversations with investors indicate ATech is one of the most anticipated small-cap IPOs in Malaysia this year. We are also encouraged to see ATech actively reducing its carbon footprint to become a best-in-class green EMS player and is prioritising local communities through upskilling and employment opportunities,” she said. 

ATech offers a comprehensive range of EMS to multinational corporations across 11 countries covering Asia Pacific, Americas and Europe. 

Its services include engineering support services, prototyping, board assembly, mechanical assembly and testing for communications and IoT products, electronic devices and semiconductor component products used by the transportation, power management, telecommunications and IoT industries. 

With a long track record of 28 years, ATech has built a business based on long-term customer relationships. 

ATech’s relationship with its top five customers range from five to 24 years. All the five clients are foreign-based companies or subsidiaries of US public-listed companies. 

For FY21, communications and IoT products contributed 89.5% to ATech’s revenue, electronic devices 9.4% and semiconductor components contributed less than 1%. 

The top three countries by revenue contribution for FY19 to FY21 were the US, Malaysia and Singapore, which collectively accounted for 93.6%, 92.7% and 89.3% of ATech’s total revenue.