KUALA LUMPUR (July 11): Sin-Kung Logistics Bhd targets an initial public offering (IPO) and listing on the ACE Market of Bursa Malaysia to fund its warehousing and distribution services’ expansion.

The company proposed a public issue of 200 million new shares and an offer for sale of 103.50 million existing shares, bringing it to an enlarged number of shares of 1.2 billion after the IPO.

Its date of listing and IPO price have yet to be announced, according to its prospectus exposure on Bursa Malaysia on Monday (July 10).

Its public issue of new shares involves 60 million new shares for the Malaysian public representing 5% shareholdings based on the enlarged share capital of 1.2 billion shares.

Meanwhile, 30 million shares from the Malaysian public provision are set aside for Bumiputera public investors.

This is followed by 45 million shares (3.8%) available for application by eligible directors, employees and persons who have contributed to the success of the company.

In terms of private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry, it includes 95 million new shares through the public issue, and 55 million shares in offer of sale from existing shares.

Meanwhile, 48.50 million shares on offer for sale are by way of private placement and allocated to selected investors.

Sin-Kung Logistics is an integrated logistics services provider principally involved in the provision of trucking services, with a focus on airport-to-airport road feeder services.

It also provides container haulage services, warehousing and distribution services and other logistics-related services to its customers.

According to the prospectus, the company entered into a sale and purchase agreement on June 27 with Merbau Sejati Sdn Bhd for the purchase of the Valdor Office and Warehouse as part of its business strategy.

It said that the down payment amounting to RM3.4 million had been paid for the industrial property, with a total built-up area of approximately 164,000 sq ft and a capacity of 192,000 pallets.

“Upon completion of its construction, the Valdor Office and Warehouse will be used for our warehousing and distribution services, catering to customers in the northern region of Peninsular Malaysia,” it said.

Construction is expected to be completed within 36 months upon signing of the agreement, with operations to start commencing by the fourth quarter of 2026, it added.

The IPO proceeds will also be spent on repayment of bank borrowings, purchase of commercial vehicles, working capital and estimated listing expenses.

The company saw its net profit at RM12.34 million for the financial year ended Dec 31, 2022 (FY2022), against RM14.50 million for FY2021. However, FY2022's figure was still higher than RM9.39 million for FY2020.

The company reported higher revenue of RM56.74 million for FY2022, from RM52.26 million for FY2021 and RM43.07 million for FY2020.

It was generated mainly from the provision of trucking services, container haulage services as well as warehousing and distribution services.

The profit after tax (PAT) margin stood at 21.8% for FY2022, compared with 27.8% for FY2021. It was similar to the 21.8% PAT margin for FY2020.

“Our company presently does not have any formal dividend policy, and the declaration of interim dividends and the recommendation of final dividends are subject to the discretion of our board, and any final dividends for the year are subject to shareholders’ approval,” it noted in the prospectus.

It also noted that future dividend payments are dependent on its financial performance, capital expenditure requirements, and general financial condition.

M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the listing exercise.