We're expecting another IPO in September, likely over a month after CTOS Digital Berhad's launch of Malaysia's largest IPO. This upcoming offering is for CEKD Berhad and is anticipated to take place in September 2021. Now, let’s get into the details!
CEKD Introduction
CEKD Group specializes in providing die-cutting solutions and is engaged in manufacturing die-cutting molds, as well as trading related tools, consumables, and accessories. Their primary markets include the paper printing and packaging sectors, electrical and electronics industry, and other fields such as automotive, plastic packaging, textiles, and leather.
CEKD Group offers die-cutting solutions | CEKD's Ace Market Listing | CEKD IPO Analysis | Subsidiaries include Sharp DCM, Focuswin, and Hotstar | Overview of CEKD Group's IPO
With over 30 years of experience in the die-cutting industry since its inception in 1989, CEKD operates three wholly owned subsidiaries: Sharp Die Cutting Mould (Sharp DCM), Hotstar (M), and Focuswin Die Cutting Mould (Focuswin). Below is a diagram illustrating the organizational structure of CEKD and the roles of each subsidiary:
CEKD Group offers die-cutting solutions | CEKD's Ace Market Listing | CEKD IPO Analysis | Sharp DCM, Focuswin, and Hotstar are subsidiaries of CEKD Berhad | Overview of CEKD Group's Structure
The details regarding CEKD Berhad's IPO are derived from disclosures by the Malaysian Ministry of International Trade and Industry (MITI).
- IPO Price Per Share: RM 0.48 (adjusted from RM 0.36 as per MITI Term Sheet)
- IPO Application Start Date: 6th September 2021
- IPO Application End Date: 17th September 2021
- Application Balloting Date: 21st September 2021
- Tentative Listing Date: 29th September 2021
- Market for IPO Listing: Ace Market
In the past three financial years (2018 to 2020), CEKD’s Diluted Earnings Per Share (EPS) were recorded at 3.50 sen, 2.78 sen, and 3.10 sen, respectively. Based on the IPO price, CEKD’s P/E Ratio stands at 15.48 to 11.61 times, which I consider reasonable given that most Ace Market IPOs fall within a P/E range of 10 to 20.
Following its listing on the Ace Market, CEKD Berhad will have an enlarged share capital of 194.573 million shares, which includes the issuance of 50.59 million new shares (26% of the enlarged capital). There will not be any offer for sale to selected investors through private placement.
The public offering consists of 50,590,000 new ordinary shares in CEKD, allocated as follows:
- 9,729,000 new shares available for application by the Malaysian public;
- 9,729,000 new shares designated for eligible directors, employees, and contributors to the group's success;
- 6,811,000 new shares offered via private placement to selected investors;
- 24,321,000 new shares allocated for private placement to Bumiputera;
The funds raised through the IPO will be allocated for various purposes (percentages not specified here):
- Acquisition of a factory for Hotstar (a subsidiary)
- Capital expenditures for equipment and software/server upgrades
- Repayment of bank loans
- Marketing activities
- General working capital
- Estimated listing expenses
As stated in the initial IPO prospectus, CEKD Berhad does not have a formal dividend policy.
Finally, here’s an overview of the shareholding structure of CEKD Berhad:
Disclaimer: I am not responsible for any gain or loss in your investment.
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