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KUALA LUMPUR (June 13): Cuckoo International Bhd, which is slated to debut on the Main Market of Bursa Malaysia on June 24, saw modest demand from the Malaysian public for its initial public offering, with an overall oversubscription rate of less than 1.5 times.
The Malaysian arm of South Korean home appliance giant Cuckoo Homesys Co Ltd, Cuckoo International received 7,908 applications for 69.33 million shares, just 1.42 times over the 28.66 million shares offered.
“The positive response for our IPO is both humbling and encouraging despite the market volatility and the rescheduling of our IPO to June 24, 2025. It reflects the confidence investors have in Cuckoo Malaysia’s vision, business model, and long-term growth potential," said Cuckoo Malaysia's chief executive officer and non-independent executive director Hoe Kian Choon in a statement Friday.
"We also believe that the final price of RM1.08 per share would allow investors to grow together with us on this journey and remain optimistic in achieving our target growth this year, underpinned by a resilient business model, sustained demand for our wellness ecosystem of products and services, and our continuous drive for innovation and market expansion. We see this listing as a launchpad for even greater impact and value creation in the years ahead,” he added.
The company announced earlier this week that its IPO shares would be issued at a reduced price of RM1.08 per share as opposed to RM1.29 previously, following the completion of the bookbuilding process for the institutional offering. The price revision, which confirmed a report by The Edge in mid-May that it would do so, came after Cuckoo postponed its planned listing by two months, from April 30 to June 24, citing heightened global market volatility.
In its Friday statement, Cuckoo International said the Bumiputera public portion of its IPO drew 2,646 applications for 19.33 million shares, translating to an oversubscription rate of 0.35 times, while demand for the remaining public portion attracted 5,262 applications for 50 million shares, an oversubscription rate of 2.49 times.
The 143.28 million IPO shares allocated via private placement to Malaysian and foreign institutional and selected investors were fully placed out, while 14.33 million issue shares reserved for eligible persons were fully subscribed, following the relevant clawback and reallocation provisions set out in the company’s prospectus.
Also clawed back were 179.1 million offer shares made available by way of private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Mti), which were reallocated to investors under the retail and institutional offerings.
Notices of allotment will be mailed to successful applicants on June 23. As the final retail price is lower than the retail price that was paid in full upon application under the retail offering, a refund of 21 sen per issue share will be made to successful applicants without any interest.
Cuckoo International's IPO involves the offering of up to 365.36 million shares, comprising an institutional offering of up to 322.38 million shares to Malaysian and foreign institutional and selected investors, as well as Bumiputera investors approved by Miti, and a retail offering of 42.98 million shares for eligible employees, contributors to the group’s success and the Malaysian public.
Cuckoo International is now expected to raise gross proceeds of about RM154.74 million, which will be used to fund the expansion of its rental business, repayment of bank borrowings, capital expenditure for new Brandshops, IT system upgrades and regional expansion into Singapore.
Its shares are valued at a trailing price-to-earnings ratio of 17.7 times, based on its net profit of RM87.3 million for the financial year ended Dec 31, 2023, against 21.2 times on the prior RM1.29 per share IPO price.
RHB Investment Bank Bhd is the sole principal adviser and managing underwriter for the IPO. It is also, together with AmInvestment Bank Bhd, the joint global coordinator, joint bookrunner and joint underwriter.