Cape EMS makes strong debut on Main Market

The company’s 46.2m IPO shares made available for application by the Malaysian public has an overall oversubscription rate of 17.8 times

CAPE EMS Bhd, an electronics manufacturing service (EMS) provider, ended its debut on the Main Market of Bursa Malaysia last Friday at RM1.50, representing a premium of 67% over its IPO price of 90 sen.

The share price opened at RM1.42, a 57.8% premium over its offer price with an opening volume of 42 million shares. It was the most actively traded stock on Bursa Malaysia.

Prior to this, Cape EMS’ 46.2 million IPO shares made available for application by the Malaysian public has an overall oversubscription rate of 17.8 times.

Cape EMS, through its subsidiaries, is involved in aluminium die cast manufacturing, EMSs and supply of electronic products and related activities.

The public issue totalled 173 million shares, which raised RM155.7 million, while its retail offering was 54.2 million shares.

From the proceeds, RM62.8 million, or 40.3%, was allocated for setting up a new cleanroom facility and purchase of new automated production lines for EMS operations. Another RM53.1 million (34.1%) is reserved for the construction of a new Senai 226 warehouse and the installation of automated storage facilities.

It has also allocated RM20.5 million (13.2%) for working capital, RM11 million (7%) for estimated listing expenses, RM4.6 million (3%) for the purchase of machinery and equipment for die-cast manufacturing related services, and RM3.7 million (2.4%) for the installation of energy saving cooling systems.

“Moving forward, we will continue to bring our company to greater heights. With the additional production capacity that we intend to purchase using our IPO proceeds, we believe that we are on track to expedite our growth in the electronics manufacturing services industry to cater to the expected increase in demand for EMS services, driven by the projected global growth of the semiconductor and electronics market,” its MD/CEO Tee Kim Chin said in a statement.

“With that said, this listing comes at an opportune time, as we intend to capitalise on our listing status to further fuel our growth trajectory going forward,” Tee added.

From its retail offering, 46.2 million shares (RM41.58 million) will be set aside for the Malaysian public, while eight million shares (RM7.2 million) will be allocated to eligible directors, employees, customers and suppliers who have contributed to the success of the group.

The institutional offering comprises 205.5 million shares (representing 22.3% of the enlarged issued share capital upon listing), and 28.8 million shares will be allocated to Bumiputra investors approved by the Ministry of International Trade and Industry, while 90 million shares will be set aside for other institutional and selected investors.

Hong Leong Investment Bank Bhd is the principal advisor, joint underwriter and joint bookrunner of the IPO and listing exercise. AmInvestment Bank Bhd is the joint underwriter and joint bookrunner. — TMR

  • This article first appeared in The Malaysian Reserve weekly print edition