KUALA LUMPUR (July 3): QES Group Bhd (KL:QES) plans to raise up to RM44.14 million through a private placement to fund expansion of its manufacturing facilities, working capital needs, and research and development activities.

In a filing with Bursa Malaysia, the company said the fundraising will involve issuing up to 83.28 million new shares to Singapore-based Ray Tech Singapore Pte Ltd (RTS), a wholly owned subsidiary of China’s Unicomp Technology Group Co Ltd, representing up to 10% of QES’ existing share capital. The shares are priced at 53 sen each, which is a 21.86% premium to the group’s 12-month volume-weighted average price of 43.5 sen.

The deal is a follow up to a May 22, 2026 memorandum of understanding QES signed with RTS to collaborate in the global semiconductor inspection equipment industry.

Ray Tech is part of Unicomp, a semiconductor equipment company listed on the Shanghai Stock Exchange with a market capitalisation of about 28 billion yuan (RM16.82 billion) as at June 30, 2026.

QES said proceeds from the placement will be used mainly to expand its operations, including about RM19 million for manufacturing upgrades such as a new clean room at its Batu Kawan plant, RM17.63 million for working capital, RM5.4 million for research and development, and RM2.21 million for issuance expenses.

Following completion, QES expects its gearing ratio to improve to 0.26 times from 0.31 times.

The group said the placement will strengthen its manufacturing capabilities and support its long-term growth in the semiconductor inspection equipment industry.

UOB Kay Hian (M) Sdn Bhd has been appointed as adviser and placement agent for the exercise. The deal remains subject to shareholder approval, Bursa Malaysia approval, and regulatory clearance from Chinese authorities.

In addition, the investor will be entitled to nominate one director to the board if it holds at least 9% of QES’ shares, with subscription and payment required within five market days after the EGM once approvals are secured.

QES operates in the semiconductor and high-technology equipment sector, supplying inspection and test equipment, materials, engineering services, and manufacturing optical inspection and automated handling systems. It also has a presence in Johor, Singapore, and the US through its subsidiaries.

The company said the share issuance is intended to strengthen collaboration between QES and Unicomp, combining Unicomp’s technology, expertise and global reach with QES’ manufacturing capabilities and market presence. 

The partnership is expected to expand product offerings, improve services and strengthen QES’ position in the semiconductor inspection equipment industry, with a nominee director helping to support closer strategic coordination. 

The fund-raising will also provide capital for the group’s expansion, which QES said is a more cost-effective option than bank borrowing, with proceeds used to enhance manufacturing, operations and its financial position.

For its first quarter ended March 31, 2026 (1QFY2026), QES posted a net profit of RM3.7 million, up from RM916,000 a year earlier, supported by stronger performance in its equipment segment. Revenue rose 27.34% to RM58.27 million, with the equipment division contributing 82.3% of total sales.

Three out of four analysts covering the stock have "buy" calls, while one has a "hold" rating, with target prices ranging from 51 sen to 74 sen, according to Bloomberg data. The average target price is 59 sen.

QES shares closed up two sen or 3.81% at 54.5 sen on Friday, valuing the group at RM454.6 million.