(From left) Minox International Group Bhd executive director Looi Poo Poo, managing director Cheong Chee Son, and chairperson Alwizah Al-Yafii Ahmad Kamal, with M&A Securities Sdn Bhd MD of corporate finance Datuk Bill Tan and head of corporate finance Gary Ting, at Minox's prospectus launch on Wednesday. (Photo by Low Yen Yeing/The Edge)

KUALA LUMPUR (Sept 20): Minox International Group Bhd, en route to list on the ACE Market of Bursa Malaysia on Oct 17, aims to raise RM22.5 million via the issuance of 90 million shares at an issue price of 25 sen per share from its initial public offering (IPO) exercise.

The stainless steel sanitary valves, tubes and fittings distributor said RM13.01 million of the proceeds will be used to grow its business, including product development and deployment, construction of its fourth warehouse in Puchong, Selangor, and setting up a new warehouse in Singapore.

The group will allocate another RM4.5 million to repay bank borrowings, followed by RM1.59 million for working capital, while the remaining RM3.4 million will be used to cover estimated listing expenses.

Minox launched its prospectus on Wednesday, where applications for the public issue will close at 5pm on Oct 3.

Minox would have a market capitalisation of RM90 million upon listing, with an enlarged share capital of 360 million shares, valuing the company at 10.68 times its price-earnings ratio, based on a net profit of RM10.3 million for the financial year ended Dec 31, 2022.

Focus on strengthening presence in semiconductor industry

Since its inception in 1998, Minox has supplied a wide range of stainless steel sanitary products to 1,700 active customers in the food and beverage industry. This comprised 88.8% of its revenue in FY2022, followed by the semiconductor industry (6.7%) and pharmaceutical (4.5%).

Upon listing, Minox managing director Cheong Chee Son said, the group will focus on growing its business in the semiconductor industry.

“Firstly, we intend to strengthen our presence in the semiconductor industry, where we see great potential. Through our own design and development team, we are set to introduce our new vacuum fittings and valves to be used in semiconductor production lines, such as electronic components, solar cells, storage media and LED manufacturing plants,” he said.

To support its growing strategy, Cheong said that the new warehouse in Puchong, which is expected to be completed in 2025, will give an additional storage area of approximately 18,690 sq ft.

This will also be supported by the new warehouse in Singapore, with an expected storage area of about 7,500 sq ft.

“[This] will provide us with additional capacity to store our new vacuum fittings and valves for the semiconductor industry, as well as to store inventories that cater for our customers in Singapore and other overseas market, such as Bahrain, Cambodia, Denmark, Germany, India, Japan, South Korea, Myanmar, Sri Lanka, Spain and the United Arab Emirates,” he said.

Additionally, the warehouse in Singapore will also reduce the group’s average cost per unit by leveraging Singapore's free trade agreements with its trade partners.

At present, Minox has 12 warehouses across Southeast Asia, including three warehouses in Malaysia, four in Indonesia, three in Singapore, and two in Thailand.

About 65% of its FY2022 revenue of RM45 million was driven by export sales, with 36.1% from Malaysia, followed by Indonesia (32.4%), Singapore (17.2%), Thailand (9.4%), and others (4.9%).

Minox, through its subsidiaries, is principally involved in the distribution of stainless steel sanitary valves, tubes and fittings, installation components and equipment, rubber hoses under “Minox” brand and other related products.

Among its notable industrial end-customers are Malaysia Milk Sdn Bhd, Unilever Foods (M) Sdn Bhd, Johnson & Johnson (M) Sdn Bhd, Dindings Poultry Processing Sdn Bhd, Chuan Sin Sdn Bhd (a wholly-owned subsidiary of Spritzer Bhd), Campbell Cheong Chan (Malaysia) Sdn Bhd, Duopharma (M) Sdn Bhd, Thai Beverage Public Co Ltd, and Nestlé Manufacturing (Malaysia) Sdn Bhd.

Read also:
ACE Market-bound Minox International inks underwriting deal with M&A Securities