This article first appeared in The Edge Financial Daily on October 31, 2017

KUALA LUMPUR: ACE Market-bound Kejuruteraan Asastera Bhd has set its initial public offering (IPO) price at 25 sen per share, as it seeks to raise up to RM20 million for business expansion.

The electrical and mechanical engineering specialist, which launched its prospectus yesterday, will list 112 million shares — including 80 million new shares — on Nov 17. The IPO closes on Nov 7.

Asastera’s profit after tax (PAT) for the financial year ended Dec 31, 2016 (FY16) rose 44.13% to RM6.56 million from RM4.55 million in FY15, with earnings per share (EPS) increasing to 2.05 sen from 1.42 sen. Revenue rose 6.92% to RM93.12 million from RM87.1 million.

However, for the five-month period ended May 31, 2017, the group’s PAT declined 0.7% to RM2.84 million, on the back of a 16.47% jump in revenue to RM43.81 million.

The IPO will increase Asastera’s share capital to RM32 million, comprising 320 million shares.

At 25 sen apiece, the IPO represents a price-earnings ratio of 12.2 times its FY16 EPS. Meanwhile, the IPO proceeds would increase Asastera’s net asset per share to 0.11 sen, from 0.08 sen currently.

Asastera said the proceeds will  support its business expansion plans in three core areas, namely to grow its market share in Malaysia, strengthen its capabilities and skill sets and diversify its revenue stream.