(from left): Swift Energy Technology Bhd corporate affairs director Suzana Abu Bakar, independent non-executive director Yee Kim Mei, independent non-executive director Zurul Ain Zulkarnain, executive director and chief operating officer Chin Saw Yong, executive director and chief executive officer Tan Bin Chee, chairman Mohammad Nizar Idris, independent non-executive director Leong Choong Wah, M&A Securities Sdn Bhd corporate finance head Gary Ting, M&A Securities corporate finance deputy head Danny Wong and M&A Securities corporate finance associate director Lee Yoke Wah.
PETALING JAYA: ACE Market-bound Swift Energy Technology Bhd, which is currently operating its production facility at close to full capacity, aims to fuel its growth through the proceeds of its initial public offering (IPO).
The provider of industrial automation and power systems seeks to raise RM70.06mil via its IPO at 28 sen per share, with over 51% of the proceeds earmarked for expansion initiatives.
About 40% of the proceeds or RM28mil will go toward expanding its fabrication facility, storage, and office space in Shah Alam, while another 3.1% or RM2.2mil will be spent on buying machinery, equipment, and software to support its operations.
The group’s chief executive officer Tan Bin Chee explained that the new production space, which will double the company’s capacity, is designed to meet increasing demand for its products and systems.
He said it will enhance the group’s capacity to handle multiple projects or orders concurrently.
“At the moment, we are seeing about 80% to 90% utilisation rate for our production facility. We have been very conservative, but with the new capital raise, we are now in a better position to expand our business more aggressively compared with the past,” Tan said during a press conference at the group’s IPO prospectus launch yesterday.
Currently, Swift Energy operates a 65,000 sq ft facility in Shah Alam, with 50,000 sq ft allocated for production.
The group plans to build a new annex to its existing factory through the bulk of its IPO proceeds.
The planned annex will be a three-storey building, with two levels dedicated to production, totalling 48,000 sq ft of production space.
Meanwhile, another 2.1% of the proceeds or RM1.5mil will be allocated to setting up a dedicated research and development centre to further drive innovation.
“Over the years, we developed our first solar photovoltaic (PV) product at 85 watts. As time passed, we upgraded to 95 watts, then 110 watts, and eventually 380 watts – the highest rating currently available in the global market,” he explained.
Tan added Swift Energy is also developing other innovative products, including transformers, switch racks, and battery chargers.
“These are pivotal in offering a complete solar power solution, and we believe we’re the only provider of a particular type of transformer in the Asia-Pacific region,” he said.
For the first nine months of its financial year ended Sept 30, 2024 (9M24), 64% of the group’s revenue was derived from local operations, with the remaining 36% from foreign operations, mainly Thailand, Singapore and China.
The group has also earmarked about 5.8% of the proceeds or RM4mil to support its expansion into Indonesia, including setting up a wholly owned subsidiary and an office in Jakarta.
Tan emphasised Indonesia’s importance as a key market, citing the group’s strong presence in the edible-oil sector over the past 23 years.
“Beyond new projects, we see significant potential in offering upgrades and maintenance services for existing plants currently supported from our headquarters in Malaysia,” Tan said.
Additionally, the group has allocated 21.4% of the proceeds or RM15mi to repay borrowings, which will reduce its gearing ratio from 0.59 times as of June 30, to 0.14 times after the IPO funds are utilised.
Another 19% or RM13.3mil will be set aside for working capital requirements, while the remaining 8.6% or RM6mil will be used to cover listing expenses.
Tan said that the group’s business revolves around three main areas – process control systems, solar PV systems, and power distribution setups.
“For now, automation, solar PV, and power distribution are our three core business lines, each contributing roughly 25% to 30% of our revenue,” Tan said.
Currently, he said the group has an order book of RM55mil and expects to secure several additional projects in the near future.
He highlighted the growing demand for the group’s solar power solutions, noting: “We foresee 2025 being a major play for our solar power solutions.”
Tan also explained Swift Energy’s unique position in the renewable-energy sector, focusing on off-grid, standalone solar power systems rather than the conventional grid-connected rooftop-solar solutions.
Based on the company’s enlarged share capital of about one billion shares at the IPO price, Swift Energy is expected to have a market capitalisation of RM280.22mil.
Application for its IPO shares will close on Dec 23, and listing has been scheduled for Jan 8, 2025.
M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
