KUALA LUMPUR (July 26): Shares in Kucingko Bhd (KL:KUCINGKO), the first animation studio listed on the Malaysian stock exchange, more than doubled on their trading debut after the company raised RM60 million from its initial public offering (IPO).
Kucingko opened at 80.5 sen, a 168% surge from its IPO price of 30 sen apiece, on trading volume of 13.45 million shares. At the opening bell, the stock added nearly RM253 million, on top of its market capitalisation of RM150 million implied by the IPO price.
Friday’s pop follows strong demand during the company’s IPO.
The IPO’s public tranche was oversubscribed by 99.02 times. New shares set aside for eligible persons as well as to select investors were also fully taken up. An offer for sale of existing shares were also fully placed out to select investors.
Under the public issue of 100 million new shares, 25 million shares were allocated to the Malaysian public and 10 million to eligible persons. The remaining 65 million new shares were privately placed out to select investors.
Of the proceeds of RM30 million from the new shares, Kucingko allocated RM17.77 million for capacity expansion, RM4.38 million to set up a sales office in the US, RM4.26 million for working capital, and the remaining RM3.6 million for listing expenses.
The IPO price of 30 sen values the company at about 18 times its net profit for the financial year ended Dec 31, 2023 of RM8.36 million, or 1.67 sen per share.
ACE Market-listed Kucingko derives almost 100% of its revenue from providing animation production services, primarily in international markets, including North America, Europe and Asia-Pacific. The company is mainly controlled by its executive directors, Ooi Kok Hong and See Chin Joo, through Cat Ching Sdn Bhd, which holds a 43.22% stake.
The company 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.
The IPO also offered 100 million existing shares through private placement to select investors, which grossed another RM30 million, which went entirely to a group of selling shareholders.
Kenanga Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the company’s IPO.