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Cybersecurity solutions specialist  INFOTEC 0253 INFOLINE TEC GROUP BERHAD aims to raise RM23.68m from IPO for strategic expansion

KUALA LUMPUR (June 20): IT infrastructure and cybersecurity solutions specialist Infoline Tec Group Bhd, which is slated to list on the ACE Market of Bursa Malaysia on July 13, aims to raise about RM23.68 million from the initial public offering (IPO) exercise, to enhance its capabilities and strengthen its market position to meet growing demand for IT solutions.

The IPO comprises a public issuance of 74 million new shares, as well as an offer for sale of 22.25 million existing shares by way of private placement to selected investors.

Of the public issuance of 74 million shares, 18.16 million shares will be allocated to the Malaysian public while 8.27 million will be for directors, employees and persons who have contributed to the success of the group. Another 2.17 million will be made available by way of private placement to selected investors, and the remaining 45.4 million will be made available by way of private placement to identified Bumiputera investors approved by the Ministry of International Trade and Industry.

Based on an issue price of 32 sen per share and an enlarged share capital of 363.2 million shares, Infoline will have a market capitalisation of RM116.2 million upon listing.

Out of the RM23.68 million gross proceeds, Infoline said RM8.46 million will be used to set up a technology centre in Kota Damansara and disaster recovery centre at a co-location facility while RM4.3 million will be used to improve the infrastructure of Infoline’s existing network operations centre.

Another RM4.7 million will be used to set up a security operations centre and RM2.2 million will be for business expansion into the Southern region of Peninsular Malaysia, East Malaysia and several major cities in People’s Republic of China.

In a statement, the group’s executive director Choo Wei Chuen said rapid technological shifts have accelerated the adoption of artificial intelligence (AI), big data, cloud computing, Internet of Things, and social and media computing.

In line with these trends, demand for IT infrastructure and cybersecurity solutions would increase as enterprises need to ensure that the large volumes of data generated are transmitted and stored securely.

“Furthermore, we also foresee strong demand for managed IT services, which is a cost-effective solution for many enterprises without having to incur substantial operational expenses to set up their own dedicated IT team. By establishing a solid IT infrastructure and putting in the right technical resources, we can provide managed IT services to customers all over the world.

“Hence, this listing exercise comes at an opportune time for us to pursue the attractive growth opportunities ahead. From the IPO proceeds, we would be able to expedite our expansion plans which would allow us to offer an expanded range of services to a larger customer base,” Choo explained.

However, the company is experiencing a material shortage amid the impact of US recession fears, rising inflation and the ongoing Russia-Ukraine war, said Infoline chief operating officer Loo Wai Hong at the IPO prospectus launch on Monday (June 20).

“We see that there's only some material shortage,” said Loo, adding that the company will monitor the situation closely.

“But we also see that [this listing] provides a nice opportunity for us to capture the market [and] there’s a lot of demand coming to the IT solution provider,” Loo added.

For the financial years ended Dec 31, 2018 to 2021 (FY18 to FY21), the group’s revenue and profit after tax (PAT) grew at a compounded annual growth rate of 33.3% and 37% respectively.

The company posted a RM3.8 million PAT on revenue of RM31.06 million in FY19, and RM7.05 million PAT on revenue of RM43.81 million in FY20.

In FY21, the group recorded a revenue of RM44.59 million and PAT of RM7.8 million.

About 64.2% of FY21 revenue was derived from Malaysia, while 18.5% was from the People's Republic of China. The remaining 17.3% was contributed from other countries such as Hong Kong, Australia, Thailand, Singapore, Taiwan, South Korea, Indonesia and the Philippines, Japan and India.

Moving forward, the group has set a target to distribute at least 30% of its annual PAT attributable to shareholders as dividends to shareholders.

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


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