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Tuesday, January 26, 2016

Chin Hin to raise RM41.08m in IPO

KUALA LUMPUR (Jan 26): Chin Hin Group Bhd, en route for listing on the Main Market of Bursa Malaysia and is expected to launch its prospectus next month, is looking to raise RM41.08 million through the initial public offering (IPO) for business expansion for the next two years, repay borrowings and working capital.

In a statement today, Chin Hin said it has signed an underwriting agreement with M&A Securities Sdn Bhd as its adviser, underwriter and placement agent in conjunction with its IPO exercise.

The building material provider's IPO entails a public issue of 63.2 million new shares at the issue price of 65 sen apiece, of which 25.29 million shares will be available for the Malaysian public, 6.4 million shares for eligible directors and employees, while 31.5 million shares via private placement to identified investors.

A total of 65 million existing shares will also be offered for sale, of which 14.41 million shares are by way of placement to identified investors, and 50.59 million shares will be offered for sale by way of placement to bumiputera investors approved by Ministry of International Trade and Industry.

Chin Hin's group managing director Chiau Haw Choon said the business expansion comprises the purchase of new plant, equipment and machineries, as well as expansion of manufacturing facilities.

Chiau noted that the construction industry is expected to continue growing and is estimated to reach RM45.53 billion in 2019, which represents a compound annual growth rate (CAGR) of 8.5% from 2014 to 2019, based on a report by the Independent Market Research (IMR).

“We believe the forecast expansion in the construction industry will underpin growth in demand for building materials, and this augurs well for the overall development of the building materials industry,” he added.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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