Thursday 28 Mar 2024
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KUALA LUMPUR (March 7): Cape EMS Bhd, which is slated to list on the Main Market of Bursa Malaysia on Friday (March 10), has reported a 40.42% climb in net profit for the fourth quarter ended Dec 31, 2022 (4QFY2022) to RM8.93 million from RM6.36 million a year earlier, on the back of increased sales of higher margin products.

The electronics manufacturing services (EMS) provider’s revenue rose 17.34% to RM118.2 million from RM100.74 million in 4QFY2021, driven by higher sales from wireless communication equipment and e-cigarettes.

“The increase in revenue was moderated by a decrease in sales from EMS of point of sales terminals and household appliances, as well as a decrease in sales from die casting and machining operations,” the company said in a bourse filing on Tuesday.

For the full financial year, Cape EMS posted a net profit of RM33.54 million, 27.7% higher than the RM26.26 million reported for FY2021, as cumulative revenue leapt 27.19% to RM437.95 million from RM344.33 million.

Likewise, the stronger full-year earnings was on the back of higher sales of wireless communication equipment and e-cigarettes.

Besides providing EMS, Cape EMS is also involved in aluminium die cast manufacturing and supply of electronic products.

Cape EMS managing director and group CEO Tee Kim Chin said that despite the global macroeconomic headwinds looming ahead, such as the interest rate upcycle, persistent US-China trade tension and global semiconductor component shortages, the company remains optimistic of its business.

“At this juncture, we are still experiencing strong order flow from our customers and we will continue to monitor the latest EMS market developments while increasing the company’s efficiency and competitiveness to remain relevant in the market in the long run,” she added.

Pitting its market capitalisation upon a listing of RM830.7 million against its FY2022 net profit of RM33.54 million, Cape EMS’ initial public offering (IPO) price of 90 sen per share pegs to a price-to-earnings ratio (PER) of 24.77 times.

Based on the 12-month trailing PERs of five EMS counters — VS Industry Bhd, SKP Resources Bhd, Aurelius Technologies Bhd, EG Industries Bhd and Scope Industries Bhd — the local industry’s average valuation is 23.07 times.

Cape EMS's IPO comprises a public issue of 173 million new shares and an offer for sale of 86.7 million existing shares, of which 205.5 million shares will be offered under the institutional offering and 54.2 million under the public offering.

Based on the 173 million new shares to be issued under the public issue at 90 sen apiece, the exercise is expected to raise RM155.7 million which the company plans to use, among others, for the construction of a new warehouse with automated storage facilities, a new cleanroom facility and automated production line, as well as working capital.

Cape EMS announced on March 1 that the 46.2 million new shares made available to the Malaysian public were oversubscribed by 17.82 times, with a total of 18,526 applications for 869.64 million shares.

Meanwhile, the eight million shares made available to eligible persons who contributed to the success of Cape EMS were fully subscribed. The 205.5 million shares under the institutional offering were also fully subscribed.

Read also:
https://www.theedgemarkets.com/node/657373
https://www.theedgemarkets.com/node/655506

Edited ByS Kanagaraju
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