KUALA LUMPUR: Kim Hin Joo (Malaysia) Bhd, en route to a July 8 listing on the ACE Market of Bursa Malaysia, expects to raise proceeds of RM32.68mil from the issue of 76 million new shares at an issue price of 43 sen a share.
According to its prospectus, the 76 million new shares comprise 20% of the group's enlarged issued share capital, of which 19 million shares will be made available to the Malaysian public, 10 million to eligible persons and 47 million to selected investors.
A further 57 million existing shares will be offered for private placement.
Upon listing, the group would have a market capitalisation of RM163.4mil based on an enlarged share capital of 380 million shares.
The distributor of baby, children and maternity products plans to utilise the proceeds of its IPO to open more Mothercare clothing outlets and increase its existing toy offerings
About a third of the proceeds or RM10mil will go towards the expansion of its retail network while RM5mil will be used for expanding its toys range.
"Two premises located in the Klang Valley are expected to be opened in the 3rd quarter of 2019 and a further 2 to 3 new outlets outside the Klang Valley between 2020 and 2021, depending on the commercial feasibility of such outlet openings," it said.
The group added that it is finalising a development agreement with a UK-based toy retailer in 2H2019 for the exclusive rights to open and operate The Entertainer toy outlets in Malaysia as a franchisee.
According to the prospectus, the group currently lacks a comprehensive toy range, resulting in a small contribution to its product mix and only 6.63% of overall revenue in FY18.
Another RM3mil of the proceeds will go towards upgrading its back-end IT infrastructure and e-commerce platform and RM2mil will be used to expand and relocate its existing outlets.
The remaining RM8.88mil will be used for working capital.
in the financial year ended Dec 31, 2018, the group posted profit after tax of RM11.11mil on the back of revenue of RM97.69mil.
The group's retail segment contributed 82.15% or RM80.25mil to total revenue while its distribution segment contributed 17.85% or RM17.43mil.
The lion's share of the business revenue stems from the Klang Valley with 76.87% contribution. About 21.4% of the revenue is derived from other locations in Malaysia and 1.75% from overseas markets.
At present, the group operates 17 Mothercare brand and 11 Early Learning Centre brand store-in-store outlets in Malaysia.
Its Home & Travel brand distribution business currently has 635 distribution points in Malaysia and overseas.