HLT Global plans to set up factory in Vietnam

PETALING JAYA: HLT GLobal Bhd, a glove-dipping lines maker which is aiming to be the first company to be listed on Bursa Malaysia in 2017, intends to use proceeds from its initial public offer (IPO) to set up a new factory.

It is also planning to expand its exports to Vietnam.

“From our research, Vietnam is a good place to invest because we can see a lot of people (businesses) going there, including (investors) from China and Taiwan,” executive director Chan Yoke Chun was quoted by Bernama yesterday.

She told reporters at the launch of the company’s prospectus yesterday that the company current order book stood at RM69mil which will keep the company busy until the end of 2017.

On the weakening of ringgit, Chan said it had no significant effect on the company’s revenue as 70% of its raw materials was purchased locally, while the remaining percentage was imported from countries like China, Denmark and Singapore.

“In fact, when we export our goods we would be turning a profit as we utilise the US dollar in our operations,” she said, adding the company held 26.6% market share in industry.

The company, which is eyeing a listing on the Ace Market on Jan 10, is selling RM33.26mil worth of shares at 45 sen each under its IPO, which include the issuance of new shares and an offer for sale of shares by its existing shareholders.

Of the total proceeds, RM17.816mil will be accrued to the company, HLT Global said in its prospectus which was released yesterday.

The company said it had set aside RM9mil for capital expenditure, RM4.916mil for working capital, RM1.5mil for research and development (R&D) and the rest to pay for listing expenses.

The offer for sale of 34.3 million shares will raise a total of RM15.4mil for the company’s founders Chan and Wong Kok Wah.

The IPO price of RM0.45 per share valued at price-earnings multiple of 9.78 times based on HLT Global’s earnings per share of 4.60 sen for the financial year of 2015 (FY15). KAF Investment Bank Bhd will act as the principal advisor and underwriter for HLT Global’s IPO.

The company controlled 26.6% of industry revenue share in 2015.

The bulk of the proceeds from the IPO is intended to finance its land acquisition and factory construction costs.

The factory which is hoped to be instrumental in increasing HLT Global’s production capacity, is projected to be built at a cost of between RM9mil and RM12mil. The company has indicated in its filing with Bursa Malaysia that additional funding for the construction of the factory would come from internally generated funds or external borrowing, if required.

The proceeds will also be utilised for working capital, R&D as well as to cover the expenses incurred for the listing process.

HLT Global remains positive on its future prospects primarily due to the anticipated growth in the rubber glove industry.

The company’s after-tax profit in FY15 rose by about 42% year-on-year to RM12.1mil as its revenue also increased commendably by 74% to RM75.7mil compared to the preceding financial year.