Sin-Kung Logistics to raise RM26 mln from IPO
LUMPUR: Integrated logistics service provider SinKung Logistics Berhad (Sin-Kung Logistics) expects to raise RM26 million under its listing exercise on the ACE Market of Bursa Malaysia.
The company seeks to utilise RM10 million (38.6 per cent) of the initial public offering (IPO) proceeds to fund its warehousing and distribution services’ expansion to meet the future rising demand from manufacturing and e-commerce sectors.
According to the Independent Market Research Report by Smith Zander Sdn Bhd, E&E industry is the largest sub-segment within the manufacturing sector.
Moving forward in 2024, the E&E industry in Malaysia will be supported by the recovery in the global semiconductor sector which is projected to grow by 13.1 per cent by World Semiconductor Trade Statistics.
Alan Ong, managing director of Sin-Kung Logistics, said the anticipated growth of the E&E industry and the exports of E&E products will not only drive the logistics and warehousing industry as a whole, but will particularly benefit the air freight industry as E&E products are generally high-value items and commonly transported through air freight.
This will in turn create demand for trucking services, including airport-to-airport road feeder services and pointto-point trucking services, to facilitate the movement of E&E products between and to/from airports.
“We are already preparing for the future with the acquisition of our Valdor Office and Warehouse that will add an additional annual capacity of 192,000 pallets, to cater to our customers in the northern region of Peninsular Malaysia when operations begin by the end of 2026.
“The Valdor Warehouse is a built-to-suit warehouse. The acquisition will provide us with more storage space in addition to our existing five warehouses to serve more and larger orders from both our existing customers and potential customers, which will lead us to an increase in revenue of our warehousing and distribution services moving forward,” he added.
As at March 20, 2024, SinKung Logistics operates five warehouses, located in Shah Alam and Port Klang, Selangor, Bukit Mertajam, Butterworth and Bukit Minyak, Penang with an aggregate annual capacity of approximately 190,260 pallets.
A further RM2 million (7.7 per cent) of the proceeds will be used to purchase 100 commercial vehicles by 2025, as part of its strategy to further expand its trucking and container haulage businesses.
The remainder of the proceeds will be used to repay bank borrowings amounting to RM9.6 million (37 per cent); working capital RM1.1 million (four per cent) and to defray the estimated listing expenses of RM3.3 million (12.7 per cent).
Under the listing exercise, SinKung Logistics is issuing 200 million new shares and an offer for sale of 103.5 million existing shares, representing 16.7 and 8.6 per cent of the enlarged share capital of Sin-Kung Logistics respectively, at an issue price of RM0.13 per share.
Based on the enlarged share capital of 1.2 billion shares, SinKung Logistics is expected to have a market capitalisation of RM156.0 million after listing.
Sin-Kung Logistics’ listing on the ACE Market of Bursa Securities is tentatively scheduled on May 15, 2024.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.