The proceeds will be utilised for assets acquisition, working capital, repayment for bank borrowings and listing expenses

by SHAFIQQUL ALIFF / TMRPic

AUTOMATED manufacturing solutions provider ECA Integrated Solution Bhd is expecting to raise RM25.5 million under its IPO exercise on the ACE Market of Bursa Malaysia while issuing issue 150 million new shares, representing 26% of the enlarged share capital, at an issue price of 17 sen per share.

The group is principally engaged in the provision of integrated production systems and standalone automated equipment to help automate the manufacturing processes of its clients, as well also provides after-sales services for technical support services and spare parts.

Its customer base comprises of global multinational manufacturers from various industries including semiconductor products, electric vehicles and automotive components, solar system components, 5G telecommunication equipment components and digital display tags.

Besides Malaysia, the group has clientele overseas in Europe, Asia Pacific and the US.

Its ED and CEO Ooi Chin Siew said of the 150 million new shares, 28.9 million shares will be made available to the Malaysian public via balloting and 14.4 million shares will be eligible to directors, employees and persons who have contributed to the success of the group.

“The remaining 106.7 million new shares are earmarked for private placement to selected investors and the group will have a market capitalisation of RM98.2 million based on the enlarged share capital of 577.5 million shares.

“For the IPO proceeds, we will be utilising RM7.7 million for the acquisition of machinery to augment its technical capabilities and to cater for higher production output. These advanced machines will enable greater customisability of our solutions to better suit customers’ needs and to handle a larger volume of complex fabrication works.

“Another RM14 million is earmarked for working capital in preparation to take on more jobs, while the remaining RM3.8 million is to be used for repayment of bank borrowings and listing expenses,” Ooi said at the press conference after launching the company’s prospectus.

He added that for the financial year ended Oct 31, 2021, 53% of the group’s revenue came from foreign markets, including China, Singapore, Vietnam, the Philippines, Eastern and Western Europe, and the US.

“By tapping into the equity capital market, we can expedite our growth as the fresh funds will endow the company with greater agility in our expansion plans to capitalise on prospects ahead,” he added.

Ooi said the enhanced operational and manpower resources will act as a cornerstone for the group to capitalise on the existing and future growth opportunities.

“As of Oct 5, 2022, our total workforce stands at 74 employees and we are looking to hire 20 additional local engineers, five software engineers and electrical engineers as well as IT engineers for our output expansion,” he said.

Moving forward, Ooi said the group has set a target to distribute up to 20% of its annual profit after tax attributable to its shareholders.

At the same time, ED and COO Chua Lye Hock said steered by digital transformation in the manufacturing industry, manufacturers worldwide are accelerating the shift towards automation to attain higher production output while simultaneously reducing reliance on manpower.

“With the proven record of our customised automation solutions, ECA Integrated has clientele comprising foreign multinational corporations that are listed, among others, on the New Stock Exchange, Nasdaq and Frankfrut Stock Exchange.

“Post listing, beyond expanding our capability and capacity, we are looking into offering smart factory solutions, for which we have already received enquiries from a key customer,” he said.