KUALA LUMPUR (July 11): QES Group Bhd, which manufactures optical test equipment and provides engineering and measurement solutions, plans to list its shares on the ACE Market of Bursa Malaysia.

In a draft prospectus, QES said it intends to issue 151.66 million shares, equivalent to 20% of its share capital, to the public, including its eligible directors, staff and selected investors.

At the same time, QES said it will be offering to sell some 75.83 million of its existing shares, equivalent to 10% of its enlarged share capital, to selected investors.

QES said the valuation of its upcoming IPO price will be benchmarked against the average price-earnings multiples of about 15.9 times of the selected test and measurement market players in Malaysia

The group said the proceeds that it will receive from listing its shares will be used to develop three key engineering products, paring down its borrowings, and fund its capital expenditures and general working capital.

QES intends to spend RM4.3 million from the total proceeds to develop the three key engineering products in the areas of vision inspection system, wafer packing and identification systems, which in the long-term will reduce labour costs.

The proceeds raised, added the group, will result in the expansion of its distribution market, which in turn will diversify its market segment from electrical and electronics, automotive and semiconductor, to higher education institution, petrochemical and pharmaceutical segments.

For the financial year ended Dec 31, 2016, QES  recorded a net profit of RM9.46 million on revenue of RM137.29 million.

Currently, Malaysia contributes 47.7% to QES’ revenue, followed by Vietnam (14.2%), Singapore (11.1%) and the Philippines (10.1%).

Based on a report by independent market research firm Protégé Associates Sdn Bhd, QES — headquartered in Shah Alam — commands nearly 10% of market share in the country’s test and measurement market.

QES counts its president and managing director Chew Ne Weng as the largest shareholder with a 57% stake, while its executive director Liew Soo Keang holds the remaining 43%.

M&A Securities Sdn Bhd is the IPO’s adviser, sponsor, underwriter and placement agent.