(From left) CBH Engineering Holding Bhd chief financial officer Tang Wai Hoong, CBH project and engineering director Ling Yang Ming, CBH independent non-exec chairwoman Lim Bee Hua, CBH exec director Cheah Min Heng, CBH director Cheah Boon Kiat, CBH ED Cheah Boon Huat, CBH managing director Cheah Boon Hwa, CBH independent non-exec director Chin Sin Peng, CBH independent non-exec director Saw Bee Yee, CBH independent non-exec director Tan Suat Hoon, Mercury Securities Sdn Bhd MD Chew Sing Guan, Mercury Securities head of corporate finance Eric Chong Soo Keng at CBH’s IPO prospectus launch on Friday. (Photo by Shahrill Basri/The Edge)
KUALA LUMPUR (Dec 20): Mechanical and electrical (M&E) engineering services provider CBH Engineering Holding Bhd (KL:CBH) has begun taking orders from its investors for its initial public offering (IPO) on Friday, to raise up to RM83.44 million on the ACE Market.
The IPO, priced at 28 sen per share, involves a public issue of 298 million new shares, and an offer for sale of 188.09 million existing shares, according to its prospectus. All in, the listing offers investors a 15.84% stake in the company.
At the IPO price, CBH will have a market capitalisation of RM526.65 million upon listing, with an enlarged share capital of 1.88 billion shares. This values the company 15.91 times the earnings for the financial year ended Dec 31, 2023 (FY2023).
The offer will close on Jan 2 next year. Listing is scheduled for Jan 16, 2025.
CBH provides M&E engineering services, including the design, installation, testing, and maintenance of electrical systems across various voltage levels, as well as mechanical systems like air conditioning and mechanical ventilation, fire protection, plumbing, and renewable energy.
The company has a diverse portfolio of projects, including substations, commercial properties such as data centres, shopping malls, hotels, and office towers, as well as industrial properties like manufacturing plants and warehouses, and high rise residential properties.
As at Nov 25 this year, CBH’s unbilled orderbook stood at RM203.7 million, with a tender book valued at RM559.7 million.
From the total proceeds of RM83.44 million, 46.2% will be used for procurement of equipment and components for future projects. The company has also earmarked 22.2% to pay subcontractors for future projects, and 20.7% for bank guarantees on the projects.
Another 4.1% will go towards the requirement of engineers and other personnel, leaving the remaining 6.8% for listing expenses.
“CBH is focused on strengthening its financial resources to support the working capital required for larger and more complex M&E engineering projects,” the company said.
“These will allow CBH to solidify its reputation as a trusted and leading service provider in the M&E engineering sector,” it added.
Meanwhile, the offer-for-sale of existing shares represents 10% of the enlarged issued shares, which will accrue entirely to Quay Holdings, controlled by co-founder and managing director Cheah Boon Hwa and his siblings.
Post-IPO, Quay's direct stake will be diluted to 72.76% stake in the company, from 98.34% stake currently.
Under the public issue, CBH will allocate 94.05 million new shares to the Malaysian public and 28.42 million shares for eligible persons. The company will also set aside 47.02 million new shares to Bumiputera investors, and 128.52 million shares to select investors through private placement.
Mercury Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter, and sole placement agent for the IPO exercise.