Infoline Tec to raise RM23m from IPO

by ANIS HAZIM / pic source:

INFORMATION technology (IT) infrastructure and cybersecurity solutions provider Infoline Tec Group Bhd en route to list on the ACE Market of Bursa Malaysia on July 13, aims to raise RM23.68 million from its IPO to enhance capabilities and strengthen its market position.

Infoline Tec CEO Choo Wei Chuen expects demand for IT infrastructure and cybersecurity solutions will increase. 

“We also foresee strong demand for managed IT services, which is a cost-effective solution for many enterprises without having to incur substantial operational expenses to set up their own dedicated IT team,” Choo said at the group’s virtual IPO prospectus launched today.

“This listing exercise comes at an opportune time for us to pursue the attractive growth opportunities ahead,” he said.

Infoline Tec’s IPO proceeds will be used to upgrade its hardware and software IT infrastructure, with an RM17.46 million or representing more than 70% of the IPO proceeds will be allocated to enhance its existing network operation centre and to set up a security operations centre, technology centre, as well as disaster recovery centre.

Additionally, RM2.22 million will be channelled towards business expansion activities aimed at growing Infoline Tec’s geographical presence in Malaysia and in international markets, while the remaining IPO proceeds will be utilised for listing expenses.

“We want to go and expand our customer base in the Southern region and also in East Malaysia.

“In the People’s Republic of China right now, our business actually strengthened in Shenzen and definitely we will be expanding our sales to Shanghai, Beijing, Wuhan and Heilongjiang,” CMO Too Yit Meng said. 

When asked whether it is the best time for a listing amid the recession risk from the Ukraine-Russian war and rising inflation, Infoline Tec COO Loo Wai Hong said the group is currently facing some material shortages, but at the same time opens a door of opportunities.

“The delivery time (material shortages) will be much longer, but we also see that this is an opportunity for us to capture into the market because this situation happened and we see there’s a lot of demand comes into IT solution provider,” Loo said. 

For the financial year ended Dec 31, 2021 (FY21), Infoline Tec posted a profit after tax of RM7.8 million, while revenue of RM44.59 million, both grew at a compounded annual growth rate of 37% and 33.3% respectively since FY18.

Moving forward, the group has set a target to distribute up to 30% of its net profit as dividends to shareholders.

Infoline Tec IPO comprises a public issuance of 74 million new shares, representing 20.38% of the enlarged shares, and an offer for sale of 22.25 million existing shares, representing 6.12% of the enlarged shares by way of a private placement to selected investors.

Based on an issue price of 32 sen per share and enlarged share capital of 363.2 million shares, the group will have a market capitalisation of RM116.2 million upon listing.

Meanwhile, MIDF Amanah Investment Bank Bhd is the principal advisor, sponsor, underwriter and placement agent for the IPO exercise.