KUALA LUMPUR (Nov 26): Winstar Capital Bhd, set to debut on Bursa Malaysia’s ACE Market in December, plans to ramp up production of solar photovoltaic (PV) mounting structures, supported by its ongoing involvement in solar panel installation services.
Winstar, which is primarily involved in the extrusion of aluminium profiles and the fabrication of aluminium ladders, views "hands-on solar panel installation services" as an important complement for the group to refine and optimise the design of its PV mounting structures, according to its chief executive officer Chua Boon Hong.
“We decided to get involved in installations to improve our products. Those using them first-hand understand the challenges, and this helps us make better designs,” Chua told reporters during the launch of its IPO prospectus. “Although this is a non-core business, if opportunities arise, we would consider expanding further,” he added.
Winstar’s foray into solar PV system installation began in 2023 when it started to carry out the business of trading of solar-related materials and accessories, and the provision of solar PV system installation services.
That same year, renewable energy firm Sunview Group Bhd (KL:SUNVIEW), through its wholly owned subsidiary Vafe System Sdn Bhd, acquired a 20% stake in the company. Sunview then increased its stake to 30% in February 2024 after acquiring a 10% stake from Mestron Holdings Bhd (KL:MESTRON).
After the IPO, Sunview’s shareholding in Winstar will be diluted to 24.15%.
Production capacity to more than double with IPO proceeds
Winstar intends to more than double its aluminium extrusion capacity using proceeds from its IPO to purchase new extrusion press machines and related equipment. The company’s annual production capacity is projected to rise from 6,705 tonnes to 15,285 tonnes — an 8,580-tonne increase.
“The company’s current production capacity utilisation rate is approximately 75%,” Chua said. “We aim to install the first two new aluminium extrusion lines by the second quarter of 2025 and the remaining two lines by the second quarter of 2026,” he added.
Nearly half of the IPO proceeds, amounting to RM9.55 million, will be allocated for capital expenditure, while RM6.24 million will go towards working capital, and the remaining RM4 million will be used to cover listing-related expenses.
For the financial year ended Dec 31, 2023 (FY2023), Winstar recorded a profit after tax (PAT) of RM8.02 million, a 52% increase from RM5.26 million in FY2022, as revenue rose nearly 40% to RM153.69 million from RM109.91 million. This was driven by a higher profit margin and better cost management.
The company posted a PAT of RM2.63 million on revenue of RM89.76 million in FY2021.
At the IPO price of 35 sen per share, Winstar’s market capitalisation is projected to be RM101.5 million, based on its enlarged share capital of 290 million shares. This values the company at a price-to-earnings (P/E) ratio of 12 times its FY2023 earnings.
Winstar aims to distribute 30% of its PAT as annual dividends to shareholders.
The IPO is available for subscription from Tuesday, with applications closing on Dec 3.
TA Securities Holdings Bhd serves as the principal adviser, sponsor, sole placement agent, and sole underwriter for the IPO, while Eco Asia Capital Advisory Sdn Bhd acts as the financial adviser.