KUALA LUMPUR (Jan 13): A1 AK Koh Group Bhd, the Johor-based processed food and beverage (F&B) manufacturer best known for its premix soup spices or meat ribs soup, is looking to raise fresh capital from a planned initial public offering (IPO) on the ACE Market of Bursa Malaysia.

The group intends to use the gross proceeds raised to expand a new factory to house a new semi-automated production line for premade pastes, and to upgrade its existing manufacturing facility, as well as to enhance its brand presence by intensifying its marketing and promotional activities.

The proposed IPO involves a public issue of 109.2 million shares, which represents 13% of its enlarged issued shares, and an offer-for-sale of 109.2 million shares at a price to be determined later, according to the draft prospectus filed with Bursa Malaysia.

Under the proposed public issue, the group has set aside 42 million new shares for the public, 8.4 million shares for eligible persons, and 58.8 million shares for institutional and selected investors via private placement.

“Our focus is primarily on Malaysian specialties, which have gained widespread acceptance both locally and internationally, appealing to consumers with a growing interest in Malaysian cuisine,” the prospectus said.

It is worth noting that the group, previously known as AK Koh Group Bhd, had planned to list on the Main Market of Bursa Malaysia by the end of 2014.

According to a draft prospectus submitted to the Securities Commission Malaysia at the time, 28.3% of the gross proceeds from the proposed public issue was earmarked for the repayment of bank borrowings.

However, the IPO plan ultimately did not materialise for reasons that were not publicly disclosed.

Started in 1986, A1 AK Koh Group now has two manufacturing plants, one in Senai, Johor and the other in Long An province of Vietnam. It sells its products directly to over 1,000 retail outlets across Malaysia, and distributed through 20 appointed distributors to reach both local and international markets

Additionally, A1 AK Koh Group also exports its products to over 20 countries, including Singapore, Vietnam, Brunei, the US, China, Australia, the UK, Indonesia, Canada, Mauritius, Japan, and Thailand.

As of Dec 2, 2024, the homegrown company had over 350 stock keeping units (SKUs) spanning from premix spices, premade pastes and seasonings, snacks, instant and dried noodles, canned seafood, premix and ready-to-drink beverages. Of these, 75% are its in-house brands.

The products are primarily marketed under its parent brand, namely A1 AK Koh, as well as sub-brands, namely Dragon Horse, Sky King, Bao Dao, MaccEagle, Sun and Lion.

It also deals with contract manufacturing and sourcing services of processed F&B products to third-party brand owners.

For its financial year ended June 30, 2024, A1 AK Koh Group made a net profit of RM11.88 million on revenue of RM96.08 million. Gross profit margin was 46.42% while profit before tax margin was 16.54%.

On its business outlook, the company said the busier and faster-paced lifestyles amongst Malaysian consumers are driving the demand for processed F&B products. Furthermore, its processed F&B products are also used by restaurants as ingredients in commercial food preparations for consistent quality and quicker preparation times.

Meanwhile, proceeds from the offer-for-sale through private placement to select investors will accrue entirely to its sole shareholder A1 Koh Malaysia Sdn Bhd (AKSMB) — the holding vehicle of the Koh family.

A1 AK Koh Group’s founder and managing director Koh Ah Kuan holds a 60% stake in AKSMB, and his wife Lim Sok Huey holds 30% stake, while their four offspring each hold 2.5% stake in the holding company.

Post-IPO, AKSMB’s stake in A1 AK Koh Group will be diluted to a 74% stake, down from 100% stake currently.

Am Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.