KUALA LUMPUR (April 14): Hock Soon Capital Bhd, a vertically integrated poultry farming group known for its production and sale of poultry eggs, is planning to list on the Main Market of Bursa Malaysia to raise funds to set up a new poultry farm.

Based on its draft prospectus filed with the Securities Commission Malaysia, the company, which rears layer chickens at its Bidor Integrated Farm in Perak, plans to put up 30% of its enlarged share capital of 500 million shares via an initial public offering (IPO).

This comprises 100 million new shares that represent 20% of its enlarged share capital, and an offer for sale of 50 million existing shares that make up 10% of the enlarged share capital.

Of the 100 million new shares, 25 million shares will be allocated to the Malaysian public via balloting, 12.5 million to eligible persons via pink forms, and 62.5 million via private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry. The offer for sale will be made to selected investors, by way of private placement.

The group plans to use the money to set up the new poultry farm in Teluk Intan, where it wants to build 25 closed-house chicken coops, and expand its feed mill and egg grading facilities.

The expansion is expected to boost its production capacity, which currently stands at about 1.48 million eggs per day.

Hock Soon Capital’s revenue — driven primarily by the sale of poultry eggs — rose 3.5% from RM146.25 million in the financial year ended Sept 30, 2023 (FY2023) to RM151.4 million in FY2024.

Over 95% of its FY2024 revenue came from eggs, which include its house-brand premium eggs under the ‘QPlus’ label, as well as unbranded and customer-branded varieties. The bulk of its sales were concentrated in the central and northern regions of Peninsular Malaysia.

For FY2024, Hock Soon Capital posted a profit after tax (PAT) of RM40.74 million, up 19% from RM34.24 million in FY2023, with a PAT margin of 26.9%.

The company is controlled by the family of its managing director Ong Boon Leng. Boon Leng is the largest shareholder with 63.9%, followed by his wife Lim Suk Gen (16.1%). The remaining 20% is split evenly between their sons Ong Keat Hoe (10%) and Ong Keat Qian (10%). Collectively, they are putting up existing shares representing 10% of the expanded capital for sale under the IPO.

Post-IPO, the Ong family, via their vehicle Ong Legacy, will hold a 70% stake, subject to a six-month moratorium.

There is no formal dividend policy currently in place, though the company paid dividends of RM63.75 million in FY2024 and another RM43 million prior to listing.

Hock Soon Capital said it intends to pay dividends to shareholders in the future, though such payments will depend upon factors such as the group's financial performance, capital expenditure requirements, and general financial condition.

M&A Securities Sdn Bhd is the principal adviser, underwriter and placement agent for the IPO.