This article first appeared in The Edge Malaysia Weekly on November 24, 2025 - November 30, 2025

LESS than a year after its debut on the ACE Market of Bursa Malaysia, mid-stream aluminium player Winstar Capital Bhd (KL:WINSTAR) is undertaking a special issuance of 41.45 million shares — equivalent to 12.5% of its enlarged share capital of 331.45 million — that management says is necessary to clear the path for its Main Market transfer, even as it results in a temporary dilution.

In an interview with The Edge, CEO Vincent Chua Boon Hong explains that the placement, to bumiputera investors, is a key step towards fulfilling the exchange’s bumiputera equity requirement, having already met the necessary profit track record.

“We are ultimately aiming for a Main Market transfer. Even now, we have achieved the profit threshold and a consistent three-year record,” Chua says. “Our next focus is ensuring positive operating cash flow to meet further compliance.”

The positive cash flow requirement may, however, soon be a thing of the past. In its latest public consultation paper dated Nov 12, the Securities Commission Malaysia has proposed, among a slew of listing requirement changes, to change the status of the positive cash-flow requirement from being a mandatory rule to a factor for consideration for companies planning to list on or transfer to the Main Market. The SC’s rationale is that this rigid requirement may not reflect the reality of high growth potential companies in certain sectors. This means an applicant may be allowed to list even with negative operating cash flow, provided other financial indicators and its growth potential are strong enough to warrant approval.

In the meantime, Winstar’s financials underscore its readiness. After deducting initial public offering listing expenses of nearly RM3 million, the group posted an adjusted net profit of RM10.08 million for the financial year ended Dec 31, 2024 (FY2024). Over the past three years, cumulative adjusted net profit reached RM21.7 million — comfortably above the profit requirement threshold required for a Main Market transfer.

Chua acknowledges that the special issuance will dilute earnings per share by about 12.5%. Yet, he stresses that Winstar aims to outpace that dilution with stronger earnings growth. “Our goal is to deliver earnings growth of more than 12.5%,” he says.

Approved at an extraordinary general meeting on Oct 8, the placement is based on an indicative price of 56 sen per share and will raise roughly RM23.21 million in fresh capital. Nearly 97.85% of proceeds — RM22.71 million — are earmarked for working capital, primarily to finance purchases of aluminium billets, the key raw material for extrusion operations.

“Aluminium billets account for about 40% of our total purchases annually,” Chua says. “Adequate working capital strengthens our ability to secure materials at competitive prices and manage production cycles more efficiently.”

Meanwhile, Winstar’s earnings trajectory continues to impress. For 1HFY2025, net profit surged 65% year-on-year to RM6.05 million, while revenue climbed 33% to RM118.78 million.

Chua attributes the growth to two drivers: resilient demand from the construction sector, which contributes about 70% of sales; and diversification into new product segments. Construction sales grew 25.4% y-o-y in 1HFY2025, while industrial product sales expanded 28.6%; the solar installation division — established in 2023 — tripled its revenue to RM2.74 million, contributing 2.3% of group sales.

“We remain a growth company,” Chua says. “Assuming profit margins hold at roughly 5%, we aim to sustain earnings growth at close to 30% in 2025, barring unforeseen circumstances.”

The company’s diversification marks a structural shift. Previously, products for the construction segment accounted for nearly 90% of its sales. Today, that portion has fallen to 70% as Winstar builds new revenue streams. The solar division, though still small, signals the company’s entry into renewable energy, while industrial products broaden exposure beyond property-linked demand.

“We are collaborating with solar EPCC (engineering, procurement, construction and commissioning) players as subcontractors and support-service providers,” Chua says. “The LSS5+ (fifth cycle of Malaysia’s large-scale solar bidding programme) projects are slated for completion between 2027 and 2028, providing us with a multi-year pipeline.”

Supporting this growth is Winstar’s new factory in Ijok, Selangor, adjacent to its current facility. The plant is in the final stages of completion and is slated to begin operations by year’s end.

“We will first introduce two new extrusion lines, boosting capacity by up to 50%,” Chua says. “The semi-automated equipment enhances efficiency and consistency. While depreciation charges rise initially, productivity gains will offset this over time.”

Two additional lines are scheduled for later commissioning, doubling overall capacity. The expansion allows Winstar to broaden its product range and reduce reliance on outsourced production. “Previously, part of our demand was met by third-party producers. With this factory, we internalise production and capture more margin,” Chua says.

The new facility also positions Winstar to respond more quickly to customer requirements. By controlling more of its production, the company reduces lead times and strengthens quality assurance — critical in industries such as construction, where project timelines and specifications often shift.

Currently serving only the domestic market, Winstar is poised to expand overseas once additional capacity comes on stream.

“We’ve received enquiries from foreign customers, particularly in Western Europe, including Spain,” Chua says. “Some are seeking an alternative to China. Once capacity frees up, we target exports to contribute up to 20% of revenue within three years.”

This export strategy reflects broader shifts in global supply chains, as rising geopolitical tensions and China’s policy changes prompt buyers to diversify sourcing.

Aluminium prices recently surged to US$2,900 per tonne, the highest since May 2022. Chua remains unfazed, saying: “We’ve been able to pass on higher input costs where necessary, and our improved scale helps us absorb fluctuations more effectively.”

Proactive inventory management further mitigates risks. “We maintain sufficient billet stock for at least three months of production,” he explains. “This ensures stable supply and helps us manage working capital efficiently.”

China’s elimination of export tax rebates for aluminium, effective December 2024, has also driven up prices of the country’s products, prompting domestic customers to turn to local suppliers such as Winstar.

“It isn’t practical for SMEs to commit to large volumes or pay bonds to secure competitive pricing from China, [and there are] the added shipping costs. That’s why I’m confident we have a moat in this business,” Chua says.

Under share-sale moratorium rules, the promoters — Chua; his father, Chua Nyok Chong; Khoo Nee Cheng; and Lee Yong Zhi — are allowed to sell 5% of their holdings come Dec 19, reducing their collective stake from 50% to 45%.

“We won’t be selling down shares when the moratorium ends,” Chua says. “We are confident in the company’s future, and our strategy is to grow value rather than take short-term profits.”

Post-placement, Winstar’s majority shareholders will see their collective stake diluted from 50% to 44%. Strategic partner Sunview Group Bhd (KL:SUNVIEW), which collaborates with Winstar on solar projects, will see its stake trimmed from 24% to 21%. Public shareholding will rise from 26% to 35%.

On the balance sheet, net assets per share will increase from 34 sen to 37 sen, while gearing will fall from 1.06 times to 0.86 times as total equity rises from RM98.6 million to RM121.3 million.

At the time of writing, Winstar shares were trading at 52.5 sen, valuing the company at RM152.3 million. The stock saw a strong uptrend in early 2025, following its IPO, climbing to 72 sen — more than double the listing price — but fell to 38 sen during April’s market angst, a widespread global sell-off triggered by US tariff announcements. It later rebounded to 63 sen, before easing to 52 sen, representing a 48.6% gain from its IPO price of 35 sen in December 2024. 

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