Company Background

The Company was incorporated in Malaysia under the Act on 21 March 2018 as a private limited company under the name of TT Vision Holdings Sdn Bhd. The company was converted into a public limited company and assumed its present name on 20 December 2018.

TTVHB was incorporated as the listing vehicle to undertake the listing on the LEAP Market where it acquired 100.0% equity interests in both TT Vision and TT Innovation pursuant thereto. TTVHB was successfully listed on the LEAP Market in May 2019 and raised gross proceeds of RM7.20 million. In order to facilitate the Listing, the company voluntarily implemented a delisting exercise in May 2022 which involved the withdrawal of the entire issued share capital of TTVHB from the Official List of the LEAP Market.

The corporate structure upon Listing is as follows:-

TTVHB is an investment holding company. Through the subsidiaries, the company is principally involved in the development and manufacturing of machine vision equipment and the provision of related products and services.

Use of proceeds

1. Repayment of bank borrowings - 20.88% (within 6 months)
2. R&D expenditure - 27.85% (within 24 months)
3. Marketing activities - 2.96% (within 24 months)
4. Working capital requirements - 37.17% (Within 24 months)
5. Estimated listing expenses - 11.14 % (Immediate

Repayment of bank borrowings - 20.88% (within 6 months)

The total bank borrowings stood at approximately RM9.63 million which comprised a term loan of RM6.05 million and a banker’s acceptance of RM3.58 million. The company intends to allocate RM6.00 million to partially reduce its said outstanding term loan that was from CIMB Islamic Bank Berhad, the details of which are as set out below:-

The partial repayment of the above-mentioned borrowings is expected to have a positive financial impact on the Group with interest savings of approximately RM0.28 million based on the existing prevailing interest rate for each of the banking facility disclosed above.

R&D expenditure - 27.85% (within 24 months)

To further differentiate the product lines, it is important that the company strive for innovation and to keep abreast with technology evolution and market needs. As such, the company intends to utilize RM8.0 million of the Public Issue proceeds for the R&D activities relating to new product development as well as upgrade/enhancement to its existing products through the development of prototypes and product demos. The company intends to develop prototypes which are early samples or models of a product that are built to test a concept or process. Subsequently, the company will develop operational product demos which will serve as a marketing and demonstration tool to its existing and potential customers in the semiconductor and solar sectors. The detailed breakdown of the IPO proceeds earmarked for R&D expenditures is set out below:-

The detailed breakdown of the IPO proceeds earmarked for R&D expenditures is set out below:-

Marketing activities - 2.96% (within 24 months)

The company intends to carry out proactive marketing activities by participating in more exhibitions and conferences. During the Financial Period Under Review, the Group participated in several exhibitions for the semiconductor and solar sectors in China, Taiwan, Malaysia and USA. With the opening up of Malaysia’s borders on 1 April 2022, the company expects to carry out more sales and marketing activities, particularly in foreign countries.

The company has identified several events which are expected to take place between 2023 and 2024 in China, Taiwan, Malaysia, Germany and USA where they intend to participate. The company aims to raise market awareness of the Group and its capabilities as well as to create more opportunities to gain orders from prospective customers.

The company has allocated a total of RM0.85 million of the gross proceeds from the Public Issue to fund the cost of participation in future exhibitions and conferences in 2023 and 2024. The company intends to participate in approximately 5 to 7 events each year and anticipates utilizing the proceeds on the following, amongst others:-

1. Exhibition registration fees;
2. Booth set-up expenses including booth design and build, and printing of brochures and banners;
3. Travel and accommodation expenses; and
4. freight/logistics cost to transport the demonstration tools and related equipment to the exhibition centre.

Working capital requirements - 37.17% (Within 24 months)

The company's business growth depends largely on the availability of working capital to secure new and additional orders from existing and prospective customers. As the Group depends on financing and internal funds available to bridge the gap for the customers’ collections and purchases of materials/parts as well as increasing its headcounts, the IPO proceeds are prioritized to expand the working capital to accelerate future growth.

Therefore, the Group proposes to allocate RM10.68 million from the total proceeds for the working capital requirements for the following:-

Business model

The business model is summarized as follows:-

The company is primarily a manufacturer of machine vision equipment that is used:-

1. for the inspection of semiconductors including optoelectronics (mainly LEDs), solar cells, discrete components, and integrated circuits (ICs); and
2. In vision-guided robotic equipment.

The company’s machine vision equipment also incorporates additional functions such as testing, sorting and reject handling. The business activities typically entail equipment design, software development, manufacture, assembly and installation of equipment and/or modules. The equipment is usually incorporated as part of the customers’ manufacturing line while some are standalone equipment.

A small proportion of the business is also in the provision of other related products and services. These include upgrading of machines, sales of spare parts, manufacture of other industrial automated equipment, provision of repair and maintenance, sales of software as well as providing training services.

Generally, customers purchase the machine vision equipment either as part of their capital expenditure plans i.e. new manufacturing lines, for retrofitting and/or upgrading of existing manufacturing lines or for replacement of existing equipment.

The general lifespan of the machine vision equipment ranges between 5 years and 10 years. However, the lifespan of the equipment would also depend on new technologies in machine vision such as improved capabilities in increasing vision inspection throughput, changes in the technical specifications including the level of tolerance as well as usage and maintenance of the equipment which would contribute to wear and tear.

Click here to continue the IPO - TT Vision Holdings Berhad (Part 2)

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