CPE Technology Bhd, a company that offers engineering support services, is set to raise RM179.58 million through an initial public offering (IPO) on December 7, 2023. The primary objective of the IPO is to support the company’s expansion plans. In a statement, CEO Lee Chen Yeong stated that the majority of the capital raised will be used to build new plants, purchase machinery and equipment, and acquire raw materials to improve production efficiency.
One of the key uses of the proceeds from the IPO will be to purchase industrial land and construct new plants, as well as to buy new machinery and equipment. Additionally, part of the funds will be allocated to repay bank borrowings, provide working capital, cover capital expenditure, and cover expenses related to listing. 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 the prospectus, Malaysia’s total 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% share of the 2022 market, generating revenue of RM145.35 million. The company anticipates that the ESI will experience a compounded annual growth rate of 8.2%, reaching RM13.88 billion by 2027 despite headwinds in the semiconductor industry