From left: Feytech Holdings Bhd independent non-executive director Leou Thiam Lai, AmInvestment Bank Bhd CEO Tracy Chen Wee Keng, Feytech executive director Tan Sun Sun, Feytech executive director/CEO Connie Go, Feytech independent non-executive chairman Datuk Mazlan Mohamad, Feytech executive director Go Yoong Chang, TA Enterprice Bhd managing director and CEO Datin Alicia Tiah, Feytech independent non-executive director Lee Wan Ning and Feytech independent non-executive director Datuk Tan Yee Boon.
PETALING JAYA: Main Market-bound Feytech Holdings Bhd aims to raise RM114mil from its initial public offering (IPO) for manufacturing and operating expansion.
With an IPO price of 80 sen per share, the automotive cover and seat manufacturer is set to debut on the Main Market on May 21.
The lion’s share of the IPO proceeds will be used for expansion plans, which will see a two-fold increase in production capacity.
The group has earmarked 10.1% or RM11.6mil of the proceeds to part-finance the acquisition of a three-acre piece of land with an approximate value of RM32.7mil in the Klang Valley.
Feytech is also using RM21.1mil for the construction of a new corporate office with a manufacturing plant and warehouse on the same land, with a built-up area of approximately 85,000 sq ft.
It also intends to relocate all its existing operations in Petaling Jaya to the new corporate office with a manufacturing plant and warehouse in the Klang Valley upon completion of the construction by this year.
Additionally, 16.4% or RM18.7mil of the IPO proceeds will be used to construct a new manufacturing plant, warehouse, annex office building and staff hostel on a part of a vacant industrial land in Kulim, Kedah with a total estimated built-up area of 84,000 sq ft.
The remainder of the IPO proceeds will be used for listing expenses and acquisition of new machinery, which include 75 sewing machines, an automated leather cutting machine and a patterning machine.
Regarding the group’s outlook, Feytech is optimistic despite projected low automotive sales and emerging competitors in the market.
Feytech chief executive officer Connie Go said: “With the emergence of Chinese original equipment manufacturers and electric vehicles, I think it’s a good time for us as it poses an opportunity to tap into these markets, as we are the only manufacturer in Malaysia currently offering covers and seats services.
“Although we have competitors in the covers sector and the seats sector, we are the only one that offers both services under one roof,” she said at a press conference after the IPO launch.
Should any new competitor pop up in the market, Go said the group still stands a good chance to compete.
Feytech chief financial officer Tan Ming Shing shared that the group’s gross profit margins were on an upward trend, with the exception during the years when Covid-19 had affected business.
“We are quite positive that our gross profit margins can be sustained in the coming years.”
Meanwhile, Go highlighted that the group’s raw materials from overseas suppliers were denominated in three main currencies, namely, the South Korean won, Chinese yuan and Japanese yen.
Commenting on leather and synthetic leather prices, the group anticipates stable prices going forward, Go said.
Separately, Feytech chief operating officer Chua Khe Gee said the production capacity at the current manufacturing plant had reached its maximum.
With the addition of the Kulim plant, its production capacity is expected to double.
Chua added that the additional manufacturing plant in Kulim should follow a proportional increase to the group’s revenue as production increases.
