KUALA LUMPUR (June 5): Animation company Kucingko Bhd said on Wednesday it has signed an agreement with Kenanga Investment Bank to underwrite its upcoming initial public offering (IPO) on the ACE Market.

The agreement marks another step forward for the company that provides 2D animation production for global broadcasters and streaming platforms since it secured listing approval from Bursa Malaysia on April 30. If successful, Kucingko would be the first animation production studio to be listed in Malaysia.

Under the agreement signed, Kenanga will underwrite the 35 million new shares for application by the Malaysian public and eligible persons under pink form allocations, Kucingko said in a statement.

The proposed IPO involves the issuance of 100 million new shares, of which 25 million shares are allocated to the Malaysian public and 10 million to eligible persons. The remaining 65 million new shares will be privately placed to select investors.

The IPO will also offer 100 million existing shares through private placement to select investors. All in all, the listing offers investors up to 40% stake in Kucingko.

Kucingko’s IPO offers “excellent diversity for investors as the Malaysian market has historically lacked publicly traded animation production companies,” said Datuk Roslan Tik, executive director, head of group investment banking and Islamic banking of Kenanga Investment Bank.

Funds raised from the IPO will be “instrumental in scaling our business through setting up a sales office in the US, our largest market, and increasing our production capacity by setting up branch offices in Sabah and Sarawak to tap into talent pools,” said Kucingko executive director See Chin Joo.

“We believe that Kucingko's position as the first 2D animation company to be listed on Bursa Malaysia will have a positive impact on the market and industry, setting a benchmark for excellence in the creative sector,” said Andrew Ooi Kok Hong, another executive director of Kucingko.

Kucingko derives almost 100% of its revenue from providing animation production services, primarily in international markets, including North America, Europe and Asia Pacific. Kucingko is mainly controlled by See and Ooi.

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 from 2020 till June 2023 with nearly 77 hours of content.

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