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KUALA LUMPUR (June 28): Kucingko Bhd has fixed its initial public offering (IPO) price at 30 sen per share to gross RM60 million from the ACE Market, with the company set to be the first listed animation production studio in Malaysia.
The IPO involves a public issue of 100 million new shares, and an offer for sale of 100 million existing shares, according to the prospectus filed with Bursa Malaysia. All in all, the listing offers investors up to 40% of the enlarged issued shares in Kucingko.
Kucingko executive director Andrew Ooi Kok Hong said the IPO proceeds will enable the animation company to expand its production capabilities locally and improve its operational efficiency, "positioning us strongly to meet the increasing demand for high-quality animation content in Malaysia and beyond".
"We are enthusiastic about the opportunities this IPO will create for our company and stakeholders," he added.
Kucingko would have a market capitalisation of RM150 million upon listing, and the IPO price values the company at about 18 times its net profit for the financial year ended Dec 31, 2023 (FY2023) of RM8.36 million, or 1.67 sen per share, according to the prospectus.
Under the public issue, Kucingko is allocating 25 million shares to the Malaysian public and 10 million to eligible persons. The remaining 65 million new shares will be privately placed to select investors.
Kucingko has earmarked RM17.77 million for capacity expansion by setting up branch offices in Sabah and Sarawak to source and tap into the talent pools, as well as refurbish existing production facilities in Selangor to expand its workforce.
The company also plans to use RM4.38 million from the proceeds to set up a sales office in the US to better facilitate client management, and RM4.26 million to meet working capital requirements. The rest will be used to defray listing expenses.
The IPO will also offer 100 million existing shares through private placement to select investors, and proceeds from the sale will go entirely to a group of selling shareholders.
Kucingko derives almost 100% of its revenue from providing animation production services, primarily in international markets, including North America, Europe and Asia-Pacific. Kucingko is mainly controlled by Ooi and See Chin Joo, another executive director.
Its wholly owned subsidiary Inspidea Sdn Bhd produces 2D animation for animated series and animated short films, having completed 59 projects worth RM63.22 million in total from 2020 to June 2023, with nearly 77 hours of content.
Kenanga Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.