Steel products maker Colform fixes IPO price at 36 sen to raise over RM60m from ACE Market listing

Saturday 18 Jan 2025

KUALA LUMPUR (Jan 15): Steel products maker Colform Group Bhd has priced its initial public offering (IPO) at 36 sen per share, which will gross up to RM60.63 million, ahead of its listing on the ACE Market.

At the IPO price, the Sabah-based firm is expected to have a market capitalisation of RM216 million upon listing. That values the company at about 17 times the earnings of its last financial year compared to its Ace Market peers TSA Group Bhd’s (KL:TSA) 13 times and Tashin Holdings Bhd's (KL:TASHIN) 18 times.

Colform's IPO involves the public issue of 114.42 million new shares and an offer for sale of 54 million existing shares, according to its prospectus launched on Wednesday. Altogether, the listing will offer investors up to a 28.07% stake in the company.

Applications for the IPO shares will close on Jan 23, and listing has been scheduled for Feb 10.

Colform mainly operates out of Kota Kinabalu, Sabah, serving the East Malaysian market. The company manufactures and processes steel products, as well as trades building materials.

The company also offers supply and installation services for its steel products, and provides project management services for construction projects.

“This IPO will enable us to expand our capabilities with a new colour coil coating production line, enhance operational efficiency, and establish our presence in Peninsular Malaysia,” Colform managing director Kang Ket Hung said in a statement.

Of the gross proceeds of RM41.19 million from the public issuance, RM18.09 million will be used for working capital, and RM9 million for setting up a colour coil coating production line at the Kota Kinabalu factory.

The company has also earmarked RM5.1 million for expansion into Peninsular Malaysia, including establishing a branch office and leasing a factory in Klang, and RM4.5 million for constructing a storage facility in Kota Kinabalu. The remaining RM4.5 million will be used to defray listing expenses.

Meanwhile, the offer for sale of existing shares will gross RM19.44 million, and accrue entirely to selling shareholder Kang Ming Trading Sdn Bhd, whose stake will be reduced to 71% after the IPO, from 95% currently.

Kang Ming is owned by the Kang family under patriarch Kang Ah Hin, who serves as a non-executive director of Colform.

Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.

Edited ByJason Ng

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