KUALA LUMPUR (July 16): Animation production house Kucingko Bhd, which is en route to listing on the ACE Market of Bursa Malaysia on July 26, 2024, said its initial public offering (IPO) has been oversubscribed by 99.02 times.

In a bourse filing, the group said it received 21,929 applications for 2.5 billion shares from the Malaysian public, compared with the 25 million new shares made available for public subscription.

There were 7,242 applications for 822.43 million shares under the Bumiputera portion, representing an oversubscription rate of 64.79 times.

The remaining public portion saw 14,687 applications for 1.68 billion shares, indicating an oversubscription rate of 133.25 times.

Further, it said the 10 million new shares made available for application by eligible directors, employees of the group and persons who have contributed to the group’s success have been fully subscribed.

The private placement of 165 million shares to selected investors have been fully placed out, it added.

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 out 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 a 40% stake in Kucingko.

With an IPO price of 30 sen per share, Kucingko would have a market capitalisation of RM150 million upon listing, and the IPO price values the company at about 18 times its net profit for the financial year ended Dec 31, 2023 (FY2023) of RM8.36 million, or 1.67 sen per share, according to the prospectus.

Kucingko has earmarked RM17.77 million for capacity expansion by setting up branch offices in Sabah and Sarawak to source and tap into the talent pools, as well as refurbish existing production facilities in Selangor to expand its workforce.

The company also plans to use RM4.38 million from the proceeds to set up a sales office in the US to better facilitate client management, and RM4.26 million to meet working capital requirements. The rest will be used to defray listing expenses.

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 executive director Andrew Ooi Kok Hong and See Chin Joo, another executive director.

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 to June 2023, with nearly 77 hours of content.

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