PETALING JAYA: Automated manufacturing solution provider, ECA Integrated Bhd (ECA Integrated) aims to raise RM25.5mil from its initial public offering (IPO) on Nov 23.
The company provides integrated production systems and standalone automated equipment and has a multi-industrial client base involved in the manufacturing of components for semiconductors, electric vehicles (EV) and automotive, solar systems as well as for 5G telecommunication equipment, and digital display tags.
Executive director-cum-chief operating officer Chua Lye Hock said that the company has a clientele consisting of foreign multinational corporations listed on bourses such as the New York Stock Exchange, Nasdaq and Frankfurt Stock Exchange.
“We are allocating RM7.7mil for the acquisition of machineries that are capable of greater customisability and can handle a larger volume of complex fabrication works.”
“Meanwhile, RM14mil is earmarked for working capital as the company anticipates more job orders, particularly for the provision of integrated production systems.
“The growth would require greater operational and manpower resources,” he said.
Chua added that working capital is also needed to support its expansion plan into smart factory solutions.
Another RM1mil and RM2.8mil will be used for repayment of bank borrowings and listing expenses, respectively.,
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In a statement, the company said that it recorded a compounded annual growth rate of 144% for its profit after tax between the financial year ended Oct 31, 2019 (FY19) and FY21. Revenue also grew to RM20.51mil in FY21, up from RM15.37mil in FY20 and RM7.67mil in FY19.
The company enjoyed a net profit margin of 39.9% in FY21. ECA Integrated also noted that half of the company’s revenue for FY21 came from overseas markets.
“Demand would continue to grow as global manufacturers shift towards automation for greater productivity, along with the expected emergence of new factories and outsourcing plans of multinational manufacturers in South-East Asia and Eastern Europe,” Chua said.
Commenting on its high profit margins, ECA Integrated’s head of corporate strategy and communication Sean Phang said that the company gives its customers custom-built solutions, which help the latter increase their production yields.
“Our automation manufacturing line is highly custom-built.
“Our customers face problems in terms of yield, so they want to increase their profit by having very advanced manufacturing lines,” he said.
Phang added that the company enjoys tax exemption benefits from the government which also contributes towards its profit margins.
Phang noted that ECA Integrated’s profit margins may decline slightly as it gears towards more growth, but added that the margins will remain elevated.
Its IPO comprises a public issue of 150 million shares at 17 sen per share.,