Upcoming IPO Series - Pekat Group Berhad

May 12, 2021

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Introduction of Pekat Group Berhad

There were a lot of IPO updates in this week and these IPOs have the estimated listing date located between June and July. These are the list of updated IPOs in this week:

Pekat Group Berhad
Nestcon Berhad
Harps Holdings Berhad
Yenher Holdings Berhad

Apart from these 4 IPOs, CTOS Digital Berhad have submitted their initial IPO Prospectus to SC (listed in the official website) in last week. But the listing of CTOS still takes time and therefore we should focus on 2 IPOs which are Pekat and Nestcon.

This post will briefly records some information of the upcoming 2021 IPO : Pekat Group Berhad and then list down what is this company as well as its business background etc. You may look for this link on brief introduction of Nestcon Berhad.

Introduction of Pekat

You may look at this YouTube video on the introduction of Pekat, but the language provided is mandarin.

Pekat (Pekat Group Berhad) is a holdings company that conducts solar photovoltaic (PV) and Earthing and Lightning Protection (ELP) businesses through its wholly-owned subsidiaries & associates companies.

Pekat is also going to be the third solar enegry theme IPO in recent years, subsequently after the listing of Solarvest Holdings Berhad and Samaiden Group Berhad.

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Pekat Group Berhad operates in 3 distinct business areas, they are:

Solar Division

Design, supply and installation of solar PV systems and power plants

ELP Division

Supply and installation of ELP systems

Trading Division

Distribution of electrical products and accessories

The following content about Pekat Group IPO is based on the information disclosed by the Malaysian Ministry of International Trade and Industry (MITI). My previous article has a detailed record of how to view this information through MITI. For those who are interested, you can refer this post for more information (in mandarin).

IPO Price Per Share ：RM 0.32
IPO Application (Begin) ：2nd June 2021
IPO Application (End) ：10th June 2021
IPO Listing Date ：23th June 2021
IPO Listing Market ：Ace Market

Pekat’s Diluted Earnings Per Share (EPS) recorded in the past three financial year ended from 2017 to 2019 were 1.5 sen, 1.7 sen and 2.3 sen, respectively. So based on the IPO price, Pekat’s P/E Ratio is 13.89 times which is still reasonable from my perspective.

Enlarged share capital of Pekat Group after listing in Ace Market is about 644.97 million shares. It includes the issuance of 138.67 million new shares (21.5% of enlarged share capital) and also an offer for sale of current 32.25 million shares to selected investors through private placement.

Malaysian Public , Pekat's Eligible Director/Employee/Contributor and the selected investors(including Bumi Investors approved by MITI) will be allocated with 32.25 mil, 16.12 mil and 90.30 mil new shares respectively.

The funds raised by Pekat Group in the IPO will be used for the following purposes:

Construction of new head office and operational facility （40.6%）
Working Capital （28.6%）
Repayment of bank borrowings （22.5%）
Estimated Listing Expenses （8.3%）

Pekat Group doesn't have any formal dividend policy as disclosed in the initial version of IPO prospectus.

Lastly, the shareholdings structure of Pekat Group after the public issue is largely contributed by 4 major investors and they are:

Chin Soo Mau 秦树茂【Managing Director】
Tai Yee Chee 戴于智【Executive Director】
Wee Chek Aik 黄则亿【Executive Director】
Hextar Holdings Sdn.Bhd 【Second largest shareholder】

These persons/entity have 34.9%，10.4%，8.6% and 19.6% of the Pekat Group's enlarged share capital, which made up total of 73.5%. They are unable to dispose or transfer their stake at least 6 months after the public isse.

Be remind that the Hextar Holdings here is the largest shareholder of Hextar Global Berhad, a company listed on Main Market of Bursa Securities. There is no any direct shareholdings connection between this listed company and Pekat Group.

Endings

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