Datasonic aims for RM40.75 million from IPO proceeds
by Ronnie Teo, email@example.com. Posted on August 4, 2012, Saturday
KUCHING: Datasonic Group Bhd (Datasonic) aims to raise RM40.75 million from its initial public offering (IPO) proceeds, with hopes to list within the second half of 2012.
According to the group’s independent non-executive chairman, General Tan Sri Dr Mohamed Hashim Mohd Ali in an email interview with The Borneo Post, Datasonic aimed to utilise about 66.51 per cent of its funds (or RM27.1 million) for capital expenditure, 14.72 per cent (RM6 million) for research and development (R&D) and the remaining amount for working capital and estimated listing expenses.
The group launched its prospectus yesterday, offering 20.37 million new shares and 7.93 million existing shares at an offer price of RM2 per share.
Six million new shares would be made available for application by the public while about four million new shares would be available for application by the group’s eligible directors, employees and persons who have contributed to the success of the group.
Additionally, 8.51 million new shares would be available for application by Bumiputera investors approved by the Ministry of International Trade and Industry, while 1.85 million new shares will be allotted by way of placement to selected investors.
Hashim explained that Datasonic placed more emphasis on capital expenditure as it has plans to diversify its offerings to existing customers and at the same time expand into China and the Asean region.
“In order to improve operations, increase efficiency and strengthen the group’s market position, we intend to set up a new headquarter-cum-Regional Personalisation Service centre and smart cards manufacturing plant, which will use up a large part of the proceeds raised,” he elaborated.
“There is growing potential in the smart ID and passport industry. We plan to expand our business both locally and overseas post-listing.”
Hashim went on to note that choosing to list now was the right move for the group as it would enable the team to raise funds in time to channel more resources and increase its capacity to carry out more projects.
The current market outlook for both the smart card and smart card solutions markets in Malaysia was favourable due to high demand from existing applications, adoption by new market areas, new technology and improvements as well as new applications being driven by the government and financial sectors.
”Based on an Independent Market Research report, the smart cards market in Malaysia is expected to continue with a cumulated annual growth rate (CAGR) of 3.7 per cent from 2012 to 2016.,” he explained.
“We expect to ride on this growth and are confident that we can and will continue to perform and achieve healthy growth in both revenue and profit after listing.”
Speaking on the upcoming listing, Hashim believed that the subscription rate would be good based on Datasonic’s good financial track record.
“We have a strong board of directors, dedicated staff and focus in R&D. We have started supplying the new MyKads beginning January 2012 and there has been pent-up demand for the latest MyKad.
“We also have a strong order book, which includes major projects like the 5-year contract to supply 10 million new polycarbonate data pages and laser engraving personalisation equipment for the new e-passports.
“Implementation of the laser engraving new polycarbonate data pages will be in early 2013.”
As of 31 May 2012, Datasonic has an order book of more than RM530 million. Out of this amount, an estimated RM116.41 million was expected to be recognised during the financial year ending December 31, 2012.
“There are also a lot of business opportunities in the health care industry. We are aiming to venture into new businesses like e-health solutions. We want to be world class solutions provider in both multi-purpose smart ID and ICAO compliant e-passport,” he enthused.
Based on an ipo price of rm2 per share and 90 million outstanding shares, datasonic hoped to garner a market capitalisation of rm180 million upon listing.