KUALA LUMPUR (April 30): Kucingko Bhd said on Tuesday that it has secured approval from Bursa Malaysia for an initial public offering (IPO) on the bourse’s ACE Market, setting it to be the first animation production studio to be listed on the Malaysian stock exchange.

The approval from Bursa Malaysia marks another step forward for the IPO, since the company filed its prospectus exposure on Dec 12, 2023.

“This marks the beginning of an exciting new chapter for us, as we are now poised to harness the potential of the capital markets to fuel our ambitious expansion plans, both within Malaysia and internationally,” Kucingko executive director See Chin Joo said in a statement.

The IPO will involve the issuance of 200 million ordinary shares, encapsulating 40% of Kucingko’s enlarged number of issued shares, where an equal portion of 100 million shares each are available under the public issue, as well as an offer-for-sale by way of private placement to selected investors.

Kucingko Bhd executive directors See Chin Joo (left) and Ooi Kok Hong (right). (Photo credit: Kucingko Bhd)

While total expected proceeds from the IPO has yet to be disclosed, See said the company intends to utilise the funds raised to elevate its production capacity, deepen its business network in the US and reinforce its market leadership, thereby enhancing shareholder value.

“Specifically, a significant portion of the proceeds will be allocated towards increasing our production capacity by setting up branch offices in Sabah and Sarawak. We are confident in tapping new talent pools from those two states to complement our current Kelana Jaya’s office with 260 artists,” he said.

“This expansion is not just about capacity; it’s about deepening our business relationships with our existing clients, and expanding the clientele network in the US. Because of this need, part of the proceeds will be strategically used to establish a sales and marketing office in the US, enabling us to be closer to our largest market and facilitate better client management and engagement,” See added.

Kucingko derives almost 100% of its revenue from providing animation production services, primarily in international markets, including North America, Europe and Asia Pacific

Its wholly owned subsidiary Inspidea Sdn Bhd produces 2D animation for animated series and animated short films, having completed 59 projects worth RM63.22 million in total during the financial years ended Dec 31, 2020 (FY2020), FY2021 and FY2022, and the six-month financial period ended June 30, 2023 (1HFY2023), with over 4,617 minutes of content.

Kenanga Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.