Furniture specialist Ecomate to raise RM16.2m from IPO
KUALA LUMPUR: Muar-based ready-to-assemble (RTA) furniture specialist, Ecomate Holdings Bhd plans to raise RM16.20mil from its proposed listing on the ACE Market of Bursa Malaysia Securities Bhd.
The RM16.20mil is raised by issuing 49 million new shares at 33 sen per share and the proceeds are to partly fund its expansion plans as it embarks on the next phase of growth, it said in a statement on Friday when it launched its prospectus via a virtual event.
Established in 2016, the Muar-based export-oriented furniture producer focuses on RTA furniture products where it undertakes its own design, development production as well as marketing and sales activities.
Its diverse range of flat-packed furniture products including but not limited to coffee tables, console tables, bookshelves as well as wardrobes. It exports to customers from more than 30 countries.
Ecomate’s revenue and profit after tax and non-controlling interest (PATNCI) grew at a compounded annual growth rate (CAGR) of 52.8% and 59.7%, respectively, from financial year ended February 2019 (FY2019) to FY2021. The revenue and PATNCI stood at RM56.3mil and RM8.5mil respectively for FY2021.
Ecomate managing director Jason Koh Jian Hui said: “Since our founding, we have grown rapidly from a humble start-up to a company on the verge of being listed on the Bursa Securities with the aim to be the leading ready-to-assemble or RTA furniture manufacturer in the region.
“Over the past 20 months or so, the Covid-19 pandemic has, admittedly, taken a toll on the global economy and brought disruptions to our business operations.
“Nevertheless, against all odds and thanks to our capable team, we had managed to sustain our growth momentum and in fact, turned in a record high net profit in FY2021.”
Koh said the lockdown restrictions and remote working policy implemented around the globe to curb the spread of Covid-19 pandemic have propelled the demand for furniture as consumers are increasingly pivoting towards purchasing furniture products online to enhance their home experience.
“We are capitalising on this opportunity swiftly as we primarily sell RTA furniture products that are shipped in flat packs. By comparison to fully-assembled furniture, our flat pack format is very much suitable for sale via e-commerce platforms due to its compact nature that enhances logistics efficiency.
“Coupled with the affordable price range through the use of eco-friendly materials in our furniture such as chipboard and medium density fibreboards, our products appeal widely to mass consumer groups around the globe.”
To capture a bigger share of the growing RTA furniture markets, Koh said Ecomate will be utilising part of the proceeds raised from the IPO to purchase machinery and equipment.
He said machinery and equipment are crucial to enhance its automation processes and increase production capacity, which is currently near full utilisation.
“In addition, a portion of the proceeds will go toward the construction of a new factory and hostel in Muar Furniture Park,” he added.
Ecomate is upbeat on its outlook moving forward as it accelerates its expansion plans to keep up with the robust order flows, especially via e-commerce sales channels for RTA furniture.
“On the corporate front, the group’s operations are now back on full scale following full vaccination of its workforce. Hence, the group is currently kept busy fulfilling the sizable order backlogs to catch up on the lost time during the Full Movement Control Order,” he added.
Of the RM16.2mil from the IPO exercise, RM6mil (37.1%) is to purchase machinery and equipment; RM2mil (12.4%) is to build its third factory to accommodate three new production lines and one block of four-storey detached hostel; RM5.3mil (32.6%) for the purchase of raw materials; and the balance RM2.9mil (17.9%) to defray estimated listing expenses.
Ecomate’s IPO entails a public issue of 49 million new shares, representing approximately 14% of the enlarged share capital.
The public issue of 4 million new shares involves 17.50 million new shares available for the public; 8.75 million new shares for the eligible directors, employees and persons who have contributed to the success of our group while 22.75 million new shares will be placed out to selected investors.
It is also offering for sale of 30 million existing shares by way of private placement to selected investors.
Applications for the public issue opened on Friday and will close on Oct 25. It is scheduled to be listed on the ACE Market on Nov 8.
Upon listing on the ACE Market, Ecomate will have a market capitalisation of RM115.50mil based on the issue price of 33 sen a share and its enlarged share base is 350 million shares.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.
https://www.thestar.com.my/business/business-news/2021/10/15/furniture-specialist-ecomate-to-raise-rm162m-from-ipo
