CPE Technology Bhd, an engineering support services company, is planning to raise RM179.58 million from an initial public offering (IPO) on December 7, 2023. The main goal of the IPO is to support the company’s expansion plans. The CEO of CPE Technology, Lee Chen Yeong, has stated that the majority of the capital raised will be used to construct new plants, purchase machinery and equipment, and acquire raw materials to optimize production.
One of the key uses of the proceeds from the IPO will be to acquire industrial land and construct new plants, as well as to purchase 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 the expenses associated with the listing process. It is expected that, at an issue price of RM1.07 per share and an enlarged issued share capital of 671.31 million shares, the company will have a market capitalization of RM718.31 million.
According to a prospectus released by Malaysia’s Securities Commission (SC), Malaysia’s total engineering support industry (ESI) was worth RM9.98 billion in 2023, up from RM9.37 billion in 2022. CPE Technology held a 1.55% share of this market in 2022 and generated revenue of RM145.35 million during that time period. However, CPE Technology expects that this market will experience compounded annual growth at a rate of 8%, reaching a value of RM13.88 billion by 2027 despite challenges in other industries such as semiconductors