KUALA LUMPUR (June 18): Sheet metal products manufacturer and scaffoldings supplier BWYS Group Bhd’s (KL:BWYS) initial public offering (IPO) on the ACE Market of Bursa Malaysia is making available 256.3 million new shares, as well as an offer for sale of 100 million existing shares, at 22 sen apiece.

The IPO will raise some RM78.39 million, of which about 28.06% or RM22 million will be raised via an offer for sale held by its shareholders, according to its prospectus on Tuesday.

The valuation gives the company a market capitalisation of RM225.55 million, based on an enlarged share capital of 1.03 billion shares upon listing on July 22.

This also values the group at a price-earnings multiple of 12.9 times, based on its profit after tax of RM17.65 million and earnings per share of 1.7 sen for the financial year ended Dec 31, 2023 (FY2023).

The public issue portion of the IPO opened for public application on Tuesday and will be closed on July 5.

BWYS, via its subsidiaries, is principally involved in the manufacturing of sheet metal products comprising roofing sheets and trusses, industrial racking systems and welded pipes. Additionally, the company also engages in the supply of scaffoldings, as well as the trading of steel materials and steel related products.

From the RM56.39 million proceeds, the group said it intends to use about RM22.84 million, or 40.4% of the proceeds, for the construction of a new factory in Penang, followed by RM10.83 million (19.2%) for new enterprise resource planning system and production, while about RM7.72 million (13.7%) will be for new machinery and equipment.

Meanwhile, RM5.5 million (9.8%) will go towards its working capital, RM4 million (7.1%) will be for repayment of bank borrowings, and the remaining RM5.5 million (9.8%) for the listing exercise.

According to its prospectus, the group said the payment of dividends or other distributions will depend upon a number of factors, including its financial performance, capital expenditure requirements, general financial condition and any other factors considered relevant by the board.

BWYS recorded a profit after tax of RM17.65 million in FY2023, which was 24.93% lower than RM23.51 million a year earlier, while revenue rose 4.17% to RM246.08 million from RM236.23 million.

M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for this IPO exercise.