PETALING JAYA (March 26): Cuckoo International (MAL) Bhd has launched Malaysia’s biggest initial public offering (IPO) in seven months to raise more than RM470 million.

The public issue of new shares at an indicative price of RM1.29 will raise almost RM185 million for Cuckoo International, according to its prospectus unveiled on Wednesday. An institutional offering of existing shares through book building meanwhile could potentially raise some RM286 million.

The final IPO price will be RM1.29 per share or the institutional price, whichever is lower.

Application for the IPO will close on April 10, with the company scheduled for listing on April 30.

The IPO of Cuckoo International would be the largest since that of 99 Speed Mart Retail Holdings Bhd (KL:99SMART) which raised RM2.36 billion in August 2024.

Cuckoo International, the local unit of South Korean appliance maker Cuckoo Homesys Co Ltd, earmarked more than half of the proceeds from product purchases to expand the rental business and 21.6% for repayment of bank borrowings.

The remainder will be used to open “Brandshops”, upgrade information technology systems for expansion into Singapore and to defray estimated listing expenses.

Funds raised from the offer for sale of 222.08 million existing shares will go entirely to a group of South Korean and Malaysian shareholders including the company’s executive director and CEO Hoe Kian Choon and his wife Mak Foong Ling.

The listing will offer up to a 25.5% stake in the company that sells and rents out appliances ranging from water purifiers to treadmills.

Application for the IPO will close on April 10, with the company scheduled for listing on April 30.

“The expansion of our business segments and offerings is guided by a dedicated focus on fostering a healthier lifestyle for our customers and fans, and delivered by an effective business model that makes our growing holistic wellness ecosystem of solutions more accessible and affordable. We believe that this has led to the company’s rise to prominence over the years,” Hoe said at the prospectus launch on Wednesday.

“With the IPO proceeds, we aim to strengthen our market position by expanding our product and service offerings. The company intends to do this by increasing product SKUs (stock-keeping units) and home care services to support growth within existing categories, while reaching new customer segments,” he added.

Cuckoo Homesys, a South Korean-listed company best known for its rice cookers, currently holds a 63% stake in Cuckoo International and supplies products to its Malaysian subsidiary.

The company is the sole and exclusive distributor of Cuckoo-branded products in Malaysia, Singapore, and Brunei. Cuckoo International also partnered Lee Swee Kiat Group Bhd (KL:LSK) to make mattresses, Fujiaire for air-conditioners, and Ogawa for massage chairs.

Under the retail tranche, a total of 28.66 million new shares will be made available for application by the Malaysian public through balloting, while 14.33 million shares will be allocated for eligible persons.

The institutional tranche, meanwhile, involves 222.08 million existing shares and 100.3 million new shares to Malaysian and foreign institutional, as well as select investors, through bookbuilding.

At the IPO price of RM1.29 per share, Cuckoo International would have a market capitalisation of RM1.85 billion. Upon listing, the company will be valued at 21.2 times its earnings per share of 6.1 sen in the financial year ended Dec 31, 2023 (FY2023).

Cuckoo International reported a net profit of RM86.87 million, on revenue of RM1.12 billion, for FY2023.

RHB Investment Bank is the sole principal adviser, joint global coordinator, joint bookrunner, managing underwriter, and joint underwriter for the IPO, while AmInvestment Bank is a joint global coordinator, joint bookrunner, and joint underwriter.

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