KUALA LUMPUR (September 28): Betamek Bhd, set to list on Oct. 26 on Bursa Malaysia’s ACE market, intends to raise RM33.8 million from its initial public offering (IPO).
As part of the listing, Betamek is issuing 67.5 million new shares, representing 15% of the expanded share capital, at an issue price of 50 Sens per share.
Based on the expanded share capital of 450 million shares, Betamek is expected to have a market capitalization of RM225 million at listing.
Betamek is an Electronic Manufacturing Services (EMS) provider specializing in the design and development, sourcing and manufacture of custom electronics and components for the automotive industry.
In a statement related to the release of the company’s prospectus on Wednesday (September 28), the group said most of the proceeds from the RM10 million IPO will be used to pay down bank debt.
A total of RM7 million will be allocated to fund Betamek’s research and development (R&D) activities for new product development and RM6.5 million to further expand its R&D office space, raw material storage and ancillary facilities to also accommodate future growth to provide for future R&D activities.
According to the company, RM3.9 million of the proceeds will be used for its general working capital, RM3.4 million to cover estimated listing costs, while the remaining RM3 million will be used to purchase machinery and equipment for its existing Rawang factory to improve its manufacturing efficiency.
Betamek Managing Director Mirzan Mahathir said the company is in discussions with its technology partners to develop and introduce more innovative technologies and new product solutions with market potential.
“Over the years we have expanded our product portfolio by incorporating new automotive electronic solutions and technologies required to complement the functionality of our products. As hybrid, electric and autonomous vehicles gain market share globally, Betamek is in a unique position to capitalize on this growing market trend and to expand and diversify our product offering with competitive solutions that incorporate innovative Malaysian DNA.
“Today’s vehicle infotainment system includes the advancement of vehicle stereo technology alongside audio and video elements, Internet of Things (IoT), GPS and navigation functions, and vehicle safety and security.
“We believe there are still many untapped opportunities for product segments related to advanced driver assistance systems, entertainment and connectivity, IoT and in-vehicle accessories. This IPO will greatly boost our future R&D activities,” he stated.
Minimal impact from supply chain issues, ringgit weaker against the US dollar
According to Betamek, the company sees minimal impact from the supply chain issue and the weaker ringgit against the US dollar.
“Even during global raw material shortages, we managed to manage the situation through close collaboration with our customers and the agility of our R&D team to look for alternative components to replace the scarce ones. We have a 100 percent track record of delivering to our customers uninterrupted during this shortage,” Megat Iskandar Hashim Ismail, Betamek’s chief operating officer, told reporters at a virtual news conference on Wednesday.
“We have matched several local suppliers who remain on the approval list with our buyers and our overseas suppliers in Hong Kong, Taiwan, Japan and China,” he added.
Nor’ Azrin Nusi, Betamek’s Chief Financial Officer, said the group is also optimistic about generating strong profits in the upcoming financial quarters as most of its revenue comes from its main customer Perusahaan Otomobil Kedua Sdn Bhd (Perodua).
“We are optimistic and our revenue comes from our main customer, Perodua, which is bringing more units to market. As long as Perodua delivers, we deliver. We have consistently proven to be Perodua’s best suppliers in terms of cost, quality and delivery,” he added.
According to the Group factsheet, its Profit After Tax (PAT) increased from RM10.9 million in the year ended March 31, 2020 (FY20) to RM12.2 million in FY21 and RM13.5 million in FY22.
Revenues were RM130.7 million in FY20, RM129.9 million in FY21 and RM133.1 million in FY22.
M&A Securities Sdn Bhd is the advisor, sponsor, underwriter and placement agent for the IPO exercise.
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