PETALING JAYA: One-stop food processing and packaging machinery solutions provider EPB Group Bhd is anticipated to register weaker earnings for financial year 2024 (FY24) amid downside risks.
RHB Research said for FY24, it anticipates core earnings to be weaker year-on-year across all segments.
The weakness was reflected in its first quarter 2024 earnings of RM1.3mil, which translated to annualised earnings of RM5.2mil.
“We understand from management that this is due to the timing of revenue recognition, which is expected to occur mainly in the second half of the year.
“While we expect FY24 earnings to weaken slightly by 7.5%, we forecast a modest three-year earnings compounded annual growth rate of 7% on the back of growing preference for convenient processed food products, as well as the growing adoption of industrial automation,” the research house said.
It said key risks include weaker-than-expected orders from existing and prospective customers, adverse fluctuations in raw material prices and foreign exchange rates.
EPB Group aims to raise RM40.08mil through its initial public offering (IPO) on the ACE Market of Bursa Malaysia.
Its IPO entails a public issuance of 71.57 million new ordinary shares at 56 sen each and an offer for sale of 40 million shares by existing shareholders.
Under the public issue, 19.57 million new shares will be made available to the public while 21.19 million shares will be offered to eligible parties such as directors, key senior management, eligible employees and business associates.
The remaining 30.80 million of the 71.57 million shares will be set aside for selected investors approved by the Investment, Trade and Industry Ministry (Miti) by way of private placement.
The offer for sale portion will see some 15.7 million shares offered to bumiputra investors approved by Miti, while another 24.3 million offer shares are reserved for sale to selected investors via private placement.
According to EPB Group’s IPO factsheet, the group has successfully rolled out a food packaging machinery solution with robotic arms in 2022 that can feed sausages at a rate of up to 500 pieces per minute.
“Moving forward, the group will be exploring collaborative opportunities with technology partners with expertise in robotics technology.”
EPB Group said it also intends to embark on the internal development of software to control robots that are integrated within its food processing and packaging machinery solutions.
