KUALA LUMPUR (July 9): Eduspec Holdings Bhd (KL:EDUSPEC), a developer and provider of information technology learning programmes and educational services, plans to diversify its business to include the provision of testing services for electrical and electronic (E&E) components.

In a filing with Bursa Malaysia on Tuesday, Eduspec said the proposed diversification will enable it to diversify its revenue stream, thereby reducing its reliance on its education business.

It anticipates the E&E testing business to divert 25% or more of the net assets of the group and/or contribute 25% or more of its net profits in the future, it said.

Eduspec marked the beginning of the group's foray into the E&E testing business when its wholly owned subsidiary Eduspec Technology Sdn Bhd (ETSB) on Dec 22, 2023 accepted a letter of award amounting to RM10 million from SMT Technologies Sdn Bhd (SMTT), a wholly owned subsidiary of EG Industries Bhd (KL:EG), engaging ETSB as an independent testing service provider to provide a variety of functional testing services for 5G Optical Printed Circuit Board Assembly (PCB Assembly) and other related products.

Following the completion of its first E&E testing job, ETSB in March 2024 secured a similar contract from SMTT worth RM30 million, which it also completed.

Taking the completion of those contracts and the favourable outlook and prospects of the E&E and semiconductor industries, Eduspec said it resolved to expand its E&E testing business by securing new contracts from other electronics manufacturing service players and leading multinational companies.

"Additionally, the group intends to leverage the experience and contacts of its executive chairman, Datuk Kang Pang Kiang, in the broader E&E manufacturing industry to facilitate this growth," it added.

To fund the growth of its new business, Eduspec proposed to undertake a private placement of 234.9 million new ordinary shares or 20% of its existing total number of issued shares to independent third-party investors to be identified, to raise up to RM30.54 million.

Proceeds from the placement will be used mainly to buy additional testing equipment to support the expansion of the group’s E&E testing business, Eduspec said.   

Subject to approvals being obtained, the proposals are expected to be completed by the fourth quarter of 2024.