Lim Seong Hai launches ACE Market IPO prospectus, seeks to raise up to RM168m

• The IPO, priced at 88 sen per share, comprises 132 million new shares and an offer for sale of 59 million existing shares, according to the prospectus released on Friday. Collectively, the listing will offer investors a 22.78% stake in the company.

KUALA LUMPUR (Feb 28): Construction and engineering firm Lim Seong Hai Capital Bhd on Friday unveiled the prospectus for its initial public offering (IPO) to raise RM168.08 million as part of its listing transfer from the LEAP Market to the ACE Market.

The IPO, priced at 88 sen per share, comprises 132 million new shares and an offer for sale of 59 million existing shares, according to the prospectus released on Friday. Collectively, the listing will offer investors a 22.78% stake in the company.

Application for the IPO will close on March 6, with the company scheduled for listing on March 21.

“As we embark on our transition to the ACE Market, our mission remains clear. To grow responsibly, to innovate continuously, and to deliver long-term value to our stakeholders," Lim Seong Hai non-executive chairman Tan Sri Lim Keng Cheng said at the prospectus launch on Friday.

Listed on the LEAP Market on July 30, 2021, Lim Seong Hai is principally involved in the construction products segment such as distribution and retail of building materials, lighting products, related mechanical and electrical products through Lim Seong Hai Lighting Sdn Bhd.

It is also involved in wholesale and retail of hardware and tools as well as rental of machinery for the construction industry, which are carried out by Knight Auto Sdn Bhd.

Currently, the group has 10 physical retail stores across the central region in Klang Valley, with online presence via its own online store and third party e-commerce platforms.

The public issue is expected to raise gross proceeds of RM116.16 million, of which RM108.86 million has been earmarked for working capital of the group's construction projects and the remaining will be used to cover estimated listing expenses.

Under the public issue, Lim Seong Hai will allocate 16.77 million new shares for the Malaysian public and reserve 12.58 million new shares for eligible individuals. Meanwhile, 102.66 million new shares will be offered to Bumiputera investors via private placement.

The offer for sale through private placement, meanwhile, involves 2.14 million existing shares to approved Bumiputera investors, and 56.86 million shares to institutional and select investors.

Proceeds from the sale of existing shares will accrue entirely to the selling shareholders — Keng Cheng, vice chairman Datuk Lim Keng Guan, managing director Lim Pak Lian and non-independent managing director of machinery, hardware and tools division Lim Keng Hun, as well as their private vehicle Lim Seong Hai Resources Sdn Bhd.

All four are siblings. Post-listing, their combined stakes will be diluted to a little under 65%.

At the IPO price of 88 sen per share, Lim Seong Hai would have a market capitalisation of RM737.76 million. Upon listing, the company will be valued at 9.92 times its earnings in the financial year ended Sept 30, 2024 (FY2024).

Lim Seong Hai reported a profit after tax of RM74.28 million on revenue of RM361.41 million for that year.

AmInvestment Bank is the IPO’s principal adviser, sponsor, sole underwriter and sole placement agent.

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