Company Background

The Company was incorporated in Malaysia under the Act on 18 May 2021 as a private limited company under the name of Mercury Securities Group Sdn Bhd. The Company was subsequently converted into a public limited company on 28 February 2022.

They are an investment holding company and through its Subsidiaries, the company is principally engaged in stockbroking, corporate finance advisory and other related businesses as well as the provision of nominee and custodian services. As at the LPD, the Group structure is as follows:

Use of proceeds

1. Margin financing facility services - 68.39% (within 24 months)
2. Enhancement of digitalisation programme and marketing activities to enhance the stockbroking business and operations of the Group - 7.33% (within 18 months)
3. Working capital - 11.80% （within 12 months)
4. Estimated listing expense - 12.48% (within 3 months)

Margin financing facility services - 68.39% (within 24 months)

One of the revenue streams of the Stockbroking Segment is margin income which comprises interest, processing fees, roll-over fees and commitment fees. From FYE 2019 to FYE 2022, the margin income as shown below grew at a CAGR of 36.09% due to higher demand for margin financing facility services from the stockbroking clients.

Currently, the company is using internally generated funds for the provision of margin financing facilities services. The amount available for margin financing facilities services is determined based on the availability of the shareholders’ funds after setting aside funds required for working capital at the material time, which varies from time to time. As such, the company intends to allocate RM26.86 million of the proceeds from the Public Issue to expand the provision of margin financing facility services to fund its existing and new stockbroking clients for their purchase of securities mainly quoted on Bursa Securities. This would in turn help to further enhance the revenue for the Stockbroking Segment via margin income. In addition to margin income, the company would be able to generate brokerage fees from the purchase and sale of quoted securities made by the margin clients.

Enhancement of digitalisation programme and marketing activities to enhance the stockbroking business and operations of the Group - 7.33% (within 18 months)

Part of the Group’s business strategies and plans is to enhance the digitalisation programme for its stockbroking operations as well as related marketing activities. As such, the company has earmarked RM2.88 million of the proceeds from the Public Issue for the following: (RM’000)

Working capital - 11.80% （within 12 months)

The Group’s working capital requirements are expected to increase in tandem with the expected growth in the business. The Group intends to utilise an estimated amount of RM4.63 million from the IPO proceeds to fund its working capital requirements, which include, but are not limited to settle the daily obligations for trades that are due and payable to Bursa Clearing for its stockbroking business, general administrative and daily operational expenses such as statutory payments, telecommunication charges and other operating expenses.

The following is a breakdown of the expected utilisation for the Group’s working capital requirements:

Business model

For the Financial Years and Period Under Review, the business model is as follows:

The Subsidiary, Mercury Securities is a licensed 1+1 broker involved in the provision of stockbroking and corporate finance advisory services.

As at the LPD, the company has a total of 81 CMSRL holders to support the following regulated activities undertaken by Mercury Securities:

Click here to continue the IPO - Mecury Securities Group Berhad (Part 2)

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