CPE Technology Bhd is set to raise RM179.58 million from an initial public offering (IPO) on December 7, 2023, with the primary goal of supporting its expansion plans. The company’s CEO, Lee Chen Yeong, has stated that the majority of the capital raised will be used for constructing new plants, purchasing machinery and equipment, and acquiring raw materials to optimize production.
The prospectus outlines one of the key uses of the proceeds from the IPO as acquiring industrial land and constructing new plants, as well as purchasing new machinery and equipment. Additionally, part of the funds will be allocated to repay bank borrowings, provide working capital, cover capital expenditure, and pay for listing process-related expenses. At an issue price of RM1.07 per share and an enlarged issued share capital of 671.31 million shares, CPE Technology is expected to have a market capitalization of RM718.31 million.
Malaysia’s engineering support industry (ESI) was valued at RM9.98 billion in 2023, up from RM9.37 billion in 2022. CPE Technology held a 1.55% market share in 2022 and generated revenue of RM145.35 million during that time period. The company anticipates that ESI will experience a compounded annual growth rate of 8.2%, reaching a value of RM13.88 billion by 2027 despite headwinds in the semiconductor industry.
CPE Technology remains optimistic about the future prospects for Malaysia’s engineering support industry due to its potential growth opportunities.
In conclusion, CPE Technology Bhd is raising funds through an IPO with a goal to support its expansion plans by investing in new plants, machinery and equipment acquisition and raw material optimization while also addressing its bank borrowings and providing working capital among other things.
As per prospectus, Malaysia’s Engineering Support Industry (ESI) had a worth of RM9