Listing of CEKD & Farm Fresh IPO
The recent price trend of CEKD Berhad, which was listed on September 29, is incredible. It dropped from RM0.60 on the day of listing to the lowest of RM0.515 last week, and then burst to the highest of RM0.995 for the next 5 days. Currently CEKD's share price still follows the uptrend and hit RM1.07 today.
If you compare the stock price trend of Ramssol Group Berhad days after listing, the price trend structures of these two companies are somewhat similar.
In addition to the outstanding performance of CEKD Berhad share price last week, an IPO on the market that is comparable to CTOS Digital and MRDIY is about to appear on the main board of Bursa Malaysia, and that IPO is the vertically integrated dairy farming player, Farm Fresh Berhad.
According to "The Edge", the market capitalisation of Farm Fresh Bhd may exceed 2 billion ringgit, which the number is the same as the cap size of CTOS Digital before it filed its draft prospectus.
As only the draft of Farm Fresh Bhd's IPO prospectus was filed on the SC's official website, it is impossible to predict when Farm Fresh will be listed on the main board of the Bursa Malaysia.
But I think it may be listed in the first half of 2022 at the latest.
You may refer why I have said so in the following tutorial video that I talked about "How to know an IPO in advance before its listing" on my YouTube channel. (English Subtitles/CC was added)
Since Farm Fresh Bhd IPO is still a few months or even half a year away from now, so I will briefly introduce a company that should be listed on Ace Makret to in the near future, that is, Orgabio Holdings Berhad IPO (康泰控股).
Orgabio - Company Background
According to the IPO prospectus, Orgabio Holdings Berhad is an instant beverage premix manufacturer (also a investment holding company) that operates two main businesses through its wholly-owned subsidiaries, namely:
- Provision of instant beverage premix manufacturing services to third party brand owners; and
- Provision of manufacturing, sales and marketing of house brand instant beverage premixes
Based on the product list on company's website, Orgabio provides a wide range of products, including three-in-one instant coffee, chocolate premix, oatmeal, food supplement premix, creamer bars, etc. The company itself has two brands: Everyday and BrogaHill .
Orgabio IPO Details
The following information of Orgabio IPO is extracted from the term sheet document disclosed by the Malaysian Ministry of International Trade and Industry (MITI). To learn how to use MITI's term sheets to understand an IPO in advance, you may refer to this video with English/Chinese Captions/Subtitles:
- IPO Price Per Share ：RM 0.24 (Indicative)
- IPO Application (Begin) ：October 2021
- IPO Application (End) ：??
- Balloting of application ：??
- Listing Date(Tentative) ：November 2021
- IPO Listing Market ：Ace Market
Orgabio Holdings Berhad has an Enlarged share capital of 247.868 million shares after its listing in Ace Market. It includes the issuance of 96.668 million new shares (39% of enlarged share capital). There is no offer for sale to any selected investors through private placement.
Public issue of 96,668,000 new ordinary shares in CEKD is in the following manner:
- 12,393,400 New shares available for application by the Malaysian public;
- 6,196,700 New shares available for application by our eligible directors,employees and persons who have contributed to the success of our group;
- 30,077,900 New shares made available for selected investors by private placement
- 78,077,900 New shares made available for selected Bumiputera investors approved by MITI through private placement
- 16,110,900 New shares made available to the Cornerstone Investor (Hai-O Enterprise Berhad)
By multiplying the enlarged share capital and Orgabio IPO price, it seems like the market capitalization of Orgabio Holdings Berhad is amount to 59.5 Million Ringgit Malaysia with a PE Multiple of 10.57.
Orgabio's indicative PE Ratio is a bit lower than other IPOs, but it still fits the range of Ace Market IPO's PE ratio between 10 to 20.
Orgabio Shareholding Structure
Orgabio's shareholding structure after IPO is as follows:
- Ean Yong & Sons hold 61% ;
- Listing Company - Hai-O Enteprise Berhad holds 12.5% ;
- Family Members (Directors, Employee etc.) holds 0.95% ; and
- Public holds 25.55%。
You have to have a basic understanding on the company structure of Orgabio's major shareholder Ean Yong & Sons. The main reason is that Orgabio is a family business (same like CEKD Berhad) before going public. For this reason, we need to get a general understanding of the members of the Ean Yong family.
- Dato’ Ean Yong Tin Sin and his wife Datin Lai You Mooi each holds 31% and 20% respectively.
- At present, all members of the family, except the youngest daughter, hold important positions in the Orgabio Group.
- Dato’ Ean Yong Tin Sin is deputy executive director.
- The eldest son Ean Yong Hien Voon who holds 16% shares served as CEO and executive director in Orgabio Holdings Berhad.
- The youngest son Ean Yong Hen Loen who holds 3% shares served as executive director in Orgabio Holdings Berhad.
- Datin Lai You Mooi and their second son Ean Yong Hien Chal are the director and manager of the production department respectively.
- Third son , Ean Yong Han Khian, is the manager of the logistics & sales department.
- The youngest daughter was served as the compliance manager from the end of 2017 to August 2019, and is now the deputy manager of the HLB compliance department.
Orgabio - Utilization of IPO Proceeds
Orgabio will use the funds raised from the IPO to build a new factory, repay bank loans, purchase equipment, use as working capital and pay for listing expenses, but the percentage of each section is not stated in the draft prospectus .
Due to the decline in the utilization rate of Orgabio's Beranang factory and in order to be able to cope with more orders in the future, Orgabio purchased a freehold industrial land in Semenyih in October 2017 in order to transfer the current production capacity to the newly established factory.
The plant is already in the construction phase accordion to Orgabio's time plan, and the company expects that this new plant will be completed in March 2023 and start operations in August 2023.
Part of the funds raised in IPO will not only be used for the construction of the new factory, but also to repay the loan related to the construction of new factory to reduce some of the interest expenses.
The company also intends to purchase 1 Intermediate Bulk Containers blending system and 2 filling machines in production chain filling for new factory in Semenyih, and the remaining IPO funds will be used to purchase raw materials, such as milk powder, coffee powder, sugar, creamer, etc., and finally Used to pay its listing fees.
Orgabio Dividend Policy
Orgabio does not have any formal dividend policy. Therefore, whether there will be dividends after the listing has to be arranged according to the company’s decision and financial performance
Endings
So that's all some basic of this upcoming Orgabio Holdings Berhad IPO.In the following November and December, there will be numerous IPO and companies to go public, such as Furniture Player Ecomate, MTT Shipping & Logistics, Swift Haulage Berhad, Home-grown electrical appliance store SenHeng New Retail Berhad etc.
Besides，another technology stock IPO named Aurelius Technologies Berhad IPO could be also coming out in December 2021.
If you want to know more about how to apply for an IPO and the tips & tricks of IPO application, you can refer to the following article.
👉 Malaysia IPO Tutorials，Tips & Tricks Sitemap
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