KUALA LUMPUR (Jan 13): Cheeding Holdings Bhd, the utilities engineering solutions provider, is looking to raise capital from a planned initial public offering (IPO) on the ACE Market of Bursa Malaysia to repay bank borrowings, raise capital for capital expenditure and to be used for performance bonds for future projects.

This is the second company that has filed a draft prospectus for an IPO on the ACE Market so far this year; A1 AK Koh Group Bhd was the first.

The proposed IPO involves a public issue of 143 million shares, which represents 17.93% of its enlarged issued shares, and an offer for sale of 65 million shares at a price to be determined later, according to the draft prospectus filed with Bursa Malaysia.

Cheeding Holdings has allocated 39.86 million new shares for the public and 8.17 million shares for eligible persons.

The company together with its two existing shareholders will place out 94.97 million shares and 65 million shares respectively. The two substantial shareholders are managing director Ng Kian Chai and his spouse Tan Sook Hoi. Post-IPO, the couple will control 73.92% stake in the company.

Cheeding Holdings is principally involved in the provision of utilities engineering solutions, comprising engineering, procurement, construction and commissioning (EPCC) and maintenance of overhead and underground infrastructure, as well as substation engineering services and related activities.

As of Nov 28, 2024, the Petaling Jaya-based company had an unbilled order book value of RM128.97 million which is expected to be realised over the next three financial years, according to the draft prospectus.

“We believe that we need to leverage on our current capabilities to expand our revenue stream by securing more underground utilities engineering services projects and substation engineering services projects,” it said.

For its financial year ended March 31, 2024, the group made a net profit of RM20.46 million on revenue of RM88.16 million. Gross profit margin was 44.5% while profit before tax margin was 31%, said the draft prospectus.

On its business expansion, the company said it is confident on its capabilities to undertake larger-scale projects which will be accretive towards its profitability and provide growth, leveraging on its project track record.

TA Securities Holdings is the principal adviser, sponsor, underwriter and placement agent for the IPO.