KUALA LUMPUR (Oct 21): Poultry firm Farmiera Bhd is seeking to raise up to RM29.25 million from an initial share sale on the ACE Market to support its upstream vertical integration strategy.

Priced at 25 sen per share, the initial public offering (IPO) comprises a public issue of 117 million new shares, representing 26% of the enlarged share capital, according to its prospectus. No existing shares will be offered, meaning that the current owners of Farmiera are not cashing out in the IPO.

Applications for the shares will close on Oct 30 and Farmiera is scheduled for listing on the ACE Market on Nov 12.

“We are now embarking on a decisive step towards upstream vertical integration,” said managing director Hong How Seng. “This expansion will enable us to secure our own day-old chick supply, exercise greater control over cost and quality, and enhance the overall reliability and resilience of our supply chain.”

Founded in 2013 and headquartered in Klang, Farmiera specialises in broiler production and raw poultry processing. Its customer base spans livestock distributors, traders and retail chains including grocery stores, hypermarkets, supermarkets and food service providers.

The company currently operates 15 broiler farms and partners with 44 contract farms across Selangor, Negeri Sembilan, Perak, Pahang and Melaka. It also runs two halal-certified processing plants in Ipoh, Perak and Lukut, Negeri Sembilan.

Farmiera plans to allocate RM22.15 million or 76% of the IPO proceeds to develop two parent stock farms and a hatchery, which will eventually supply 40% of its poultry farming requirements.

The parent stock farm is scheduled for completion in the second quarter of 2026, with the supporting hatchery expected to be operational by the first half of 2027. At present, Farmiera sources all its day-old chicks from third-party suppliers.

“We are confident these strategic initiatives will position Farmiera for sustainable growth and deliver enduring value to our stakeholders,” Hong added.

The company has also set aside RM2.8 million, or a little under 10%, for working capital, with the remainder earmarked to defray listing expenses.

Under the public issue, 22.5 million shares will be offered to the Malaysian public while 9 million shares are reserved for eligible persons. The IPO also includes private placements of 56.25 million shares to approved Bumiputera investors and 29.25 million shares to selected investors.

Post-listing, Farmiera’s sole shareholder Asas Juara Sdn Bhd will see its stake reduced from 100% to 74%. Asas Juara is 51% owned by Hong’s private vehicle HHS Global Sdn Bhd and 25.59% by Keystone Capital Sdn Bhd linked to deputy CEO Tan Kok Cheong.

The remaining stake in Asas Juara is held by TCH Capital Sdn Bhd associated with senior farm operations manager Tan Chin Heng, alongside three other shareholders.

At the IPO price, the company will have a market capitalisation of RM112.5 million, or 16 times its trailing earnings. For the financial year ended Dec 31, 2024, Farmiera posted a profit after tax of RM7 million on revenue of RM561.07 million.

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