MMIS to raise RM5m from listing on LEAP Market

From left: MMIS Bhd head of corporate finance Dr Jeffrey Chin Fook Kheong, executive director Low Oo Seng, managing director

KUALA LUMPUR: MMIS Bhd, which makes precision engineering parts for the semiconductor industry, seeks to raise RM5mil from its proposed listing on the LEAP Market of Bursa Malaysia Securities.

In its information memorandum issued on Friday, it said it would issue up to 50 million shares, or 10% of its enlarged share capital, at 10 sen each. 

Of the RM5mil, it plans to use 40% of the proceeds or RM2mil as capital expenditure including the purchase of four machines. Currently, it has 24 machines.

It also plans to use 40% of the proceeds or RM2mil as working capital while RM1mil or 20% would be for estimated listing expenses.

On listing, its enlarged share capital will be RM15mil, comprising 500 million shares.

MMIS said its parts are mainly purchased by companies involved in semiconductor manufacturing equipment and automated testing equipment for the semiconductor industry

“We are dependent on Towam Sdn Bhd and ViTrox Technologies Sdn Bhd, who collectively accounted for 96.68%, 98.29% and 96.86% of our revenue for the FYE 30 June 2017, FYE 30 June 2018 and six-month FPE 31 December 2018, respectively,” it said.

Towam makes semiconductor manufacturing equipment and high precision moulds. ViTrox designs and manufactures automated vision inspection equipment and system-on-chip embedded electronics devices for the semiconductor and electronics packaging industries. 

“We supply machining parts and frames to Towam and ViTrox Technologies and are a major supplier for such products supplied to them,” it said.

Sierac Corporate Advisers Sdn Bhd has been appointed as the Approved Adviser, Custodian & Placement Agent by MMIS Berhad for the Proposed Listing.
 
Meanwhile, in a separate statement, MMIS managing director Loh Chin Soon said the listing would enable the company to tap into the capital market for future fundraising to pursue growth opportunities, gain recognition and enhance the company’s stature, increase market awareness of the company’s services and expand its customer base.
 
“Our production capacity presently operates at an average utilisation rate of approximately 73% while our production floor space is fully utilised. 

“The plan to construct a new facility with an estimated built-up area of 27,000 sq ft is expected to be completed by mid-2020. The plan to amalgamate both production facilities will increase the built-up area by 7,200 sq ft and the total current production space from 32,400 sq ft to 66,600 sq ft, by the end of 2020,” he said.
 
Loh said precision engineering parts can be used across multiple industries such as semiconductor, electronics packaging, oil and gas, power generation, medical, engineering as well as automotive industries. 

“The precision engineering industry in Malaysia has also shown an increase from RM4bill in 2010 to RM7.1bil in 2018 at a compound annual growth rate (CAGR) of 7.4%. The growth of the precision engineered industry in Malaysia will be supported by demand for precision engineered parts by end user markets such as the manufacturing sector and the global market for the production of electronic products.”
 
For the financial year ended June 30, 2018 (FY2018), MMIS posted revenue of RM17.02mil, up by 82% from RM9.34mil a year ago.

Its profit before tax for FY2018 was RM5.27mil, double the RM1.71mil in FY17.

Sierac Corporate Advisers Sdn Bhd is the approved adviser, custodian and placement agent.