From left: Topmix executive director Jessie Tan Lee Hong, managing director Jack Teo Quek Siang, independent non-executive chairman Chang Tian Kwan, M&A Securities managing director Datuk Bill Tan and head of corporate finance Gary Ting
KUALA LUMPUR: Topmix Bhd aims to raise RM25.6mil from its upcoming initial public offering (IPO) as it heads towards a listing on the ACE Market of Bursa Malaysia on April 23, 2024.
In a statement, the total surface decorative products company said it has earmarked RM11.3mil of the total proceeds for working capital, with another RM6mil allocated towards business expansion, marketing and sales.
The group also plans to allocate RM5.3mil towards expanding into the assembly of melamine faced chipboard (MFC) products, and the remaining RM3mil towards defraying listing expenses.
"The inclusion of MFC products will broaden our product range and allow us to target new customer segments, namely furniture product manufacturers.
"By using MFC for the internal parts of furniture like cupboards and tables, and our HPL products for the surface, we can offer customers a fully assembled product based on the colour scheme of their selected HPL and MFC products at competitive prices," said managing director Teo Quek Siang at the launch of the company's IPO prospectus.
Meanwhile, Topmix plans to establish a sales office in Pulau Pinang to capture business opportunities in the northern region of Peninsular Malaysia.
It will also expand its warehouse capacity in the central region to meet the growing demand for surface decorative products, allowing it to maintain a larger inventory for timely and cost-efficient order fulfilment.
On the company's outlook, Teo said demand for surface decorative products will grow due to recovery in the property markets, increased foreign and domestic investments, population growth and urbanisation, higher income levels and supportive government initiatives to encourage home ownership.
"To capitalise on this trend, we will intensify our marketing and sales activities and strengthen our Topmix HPL mobile application with features such as augmented reality technology and 360 virtual tour of our showroom to increase brand and product awareness," he said.
Topmix’s IPO exercise entails a public issuance of 82.7 million new ordinary shares, representing 21% of its enlarged share capital, as well as an offer for sale of 19.7 million existing shares, or 5% of its enlarged share capital by way of private placement to selected investors.
Out of the new shares, 19.7 million shares will be made available to the Malaysian public via balloting, 7.9 million shares to eligible directors, employees and persons who have contributed to the success of Topmix, and the remaining 55.1 million shares to selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry and selected investors via private placement.
Based on the IPO price of 31 sen per share and its enlarged issued shares of 393.9 million shares, Topmix’s market capitalisation upon listing will be about RM122.1mil.
For the financial period ended Sept 30, 2023, the group reported a revenue and net profit of RM51mil and RM5.6mil, respectively.
The HPL products segment accounted for 94.1% of the group’s revenue in FY23, while the remaining 5.9% was attributed to the other surface decorative products segment and kitchen and wardrobe accessories segment.
Applications for the public issue are open from today and will be closed on April 4, 2024 at 5pm.
M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
