Initial Public Offering (IPO)

IPO - Betamek Berhad (Part 1)

MQTrader Jesse
Publish date: Wed, 05 Oct 2022, 10:10 AM

Company Background

The Company was incorporated in Malaysia under the Act on 7 December 2021 as a private limited company under the name of Betamek Sdn Bhd. On 18 March 2022, the company converted into a public limited company and adopted its present name

The Company is principally an investment holding company and provides management services to its subsidiary. The Group structure as at LPD is as follows:

Through the subsidiary, the company is engaged in the provision of EMS for the automotive markets predominantly in Malaysia, where it undertakes D&D, procurement, and manufacturing as well as after-sales services in respect of the assembly and production of fully-assembled electronic products.


Use of proceeds

  1. R&D - new product development - 20.7% (within 36 months)
  2. To expand R&D office space, raw material storage and ancillary facilities - 19.3% (within 36 months)
  3. Purchase of new process equipment - 8.9% (within 12 months)
  4. Working capital requirement - 11.4% (Within 3 months)
  5. Repayment of bank borrowings - 29.6% (Within 3 months)
  6. Estimated listing expenses - 10.1% (within 1 month)


R&D - new product development - 20.7% (within 36 months)

The company plans to further expand the range of product offerings relating to automotive electronics for future automobile models and variants. To facilitate this initiative, the company has allocated RM7.0 million from the proceeds of the Public Issue for the R&D activities in respect of new product development in relation to vehicle visual and sensor features, safety features, infotainment, and smartphone integration, telematics, and e-call solutions, and cloud and IoT connected mobility applications.

The following is a breakdown of the expected utilisation for our R&D activities in respect of new product development:


To expand R&D office space, raw material storage and ancillary facilities - 19.3% (within 36 months)

In conjunction with the renovation of the Group’s new manufacturing facility, the company also requires more space for our office and raw material storage to cater to future growth, as well as for future R&D activities. Therefore, as part of the business strategies, the company has allocated RM6.5 million from the proceeds of the Public Issue for the expansion of the R&D office space, raw material storage, and ancillary facilities.

The expansion of the office and ancillary facilities will entail:

  1. The demolition of the existing canteen and surau building, to be replaced with a 3-story annex building with an estimated built-up area of 2,736 sq m to the house
  2. Renovation of the existing first-floor office space and facilities.

    Based on internal management estimates, the total construction cost of the 3-story annex building is estimated at RM6.0 million     comprising the following:


Purchase of new process equipment - 8.9% (within 12 months)

The company regularly reviews its manufacturing processes and explores ways to improve its manufacturing capabilities in order to meet customer requirements. The company plans to utilize RM3.0 million from the proceeds of the Public Issue to acquire machinery and equipment for the existing Rawang Factory to enhance manufacturing efficiency and capabilities.

The breakdown of the estimated purchase cost for each type of process equipment is as follows:


Working capital requirement - 11.4% (Within 3 months)

The company has allocated RM3.9 million of the proceeds raised from the Public Issue to supplement the working capital requirements of the Group. As there are acute global shortages of ICs, which has led to longer lead times, the proceeds shall be used to purchase raw materials, mainly ICs, semiconductor components and LCDs, for the operational requirements, which is to maintain an inventory buffer to withstand the possible shortages in global supply, to meet its targeted inventory turnover period of 9 months. The breakdown of funds to be used towards these purchases shall be determined at such time when the said components are required.

The inventory turnover for FYE 2019, FYE 2020, FYE 2021 and FYE 2022 is as follows:


Repayment of bank borrowings - 29.6% (Within 3 months)

The company has allocated RM10.0 million to repay the term financing and revolving credit partially. They drew down bank borrowings of RM24.0 million for the renovation of our Rawang Factory as well as the purchase of new equipment and machinery. The full drawdown of the term financing from Maybank for the refinancing of our Group’s term loans from Affin has been completed in May 2022. For illustrative purpose below, we have indicated which facility the RM10.0 million repayment will be made to, in order of priority:


Business model

The company is an EMS provider, specialising in D&D, procurement and manufacturing of customised electronics and components for the automotive industry.

The company is principally involved in the D&D and manufacture of:

  1. Vehicle audio products and components comprising vehicle infotainment systems and audio video accessories (such as HDMI adapters and cables); and
  2. Vehicle accessories such as air conditioning control panels, USB chargers, mirror switches, switch clusters, and power sockets.

The company is able to support the automotive industry value chain as they undertake product D&D, prototyping, board assembly, electronics and mechanical assembly, testing, labeling packaging and support services for automotive marques.

The business model is illustrated in the diagram below:


Click here to continue the IPO - Betamek Berhad (Part 2)


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1 person likes this. Showing 9 of 9 comments

AlanKLNg28

Is this owned by Tun M's son?

2 months ago

EatCoconutCanWin

Repayment 30% , crazy huge amount hutang

2 months ago

MQTrader Jesse

@AlanKLNg28 Yes. Mirzan Bin Mahathir owned the company

2 months ago

mohammadfitri

Wow seem like political related company, share price might affect by the election result.

2 months ago

speakup

IPO is to cash out before GE?
cos after GE if BN lose, no chance IPO already cos ppl will question why this company given big Perodua contract (probably thru direct nego, not tender).

2 months ago

speakup

apply only if u think BN will win
otherwise stay out

2 months ago

mohammadfitri

yeah political related company just like gamble

2 months ago

ZackT73

Of course BN will win la, magician leh

2 months ago

Michael Kwok

The project by ph also direct negotiationlah.duhh.by billions.small project only by tender.
 Posted by speakup > 3 hours ago | Report Abuse

IPO is to cash out before GE?
cos after GE if BN lose, no chance IPO already cos ppl will question why this company given big Perodua contract (probably thru direct nego, not tender).

2 months ago

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