KUALA LUMPUR: China Automobile Parts Holdings Ltd (CAP), an automobile chassis components manufacturer heading for a listing on Bursa Malaysia, has seen its public issue oversubscribed by 2.36 times. Its share placement to selected investors has also been fully subscribed.
The company said in a statement yesterday that its public issue of 30 million new shares at an offer price of 68 sen each had attracted 3,908 applications for 100,740,700 shares.
The 60 million new shares to be placed out to selected investors have also been fully subscribed. The company closed the share application last Friday and the balloting was held yesterday morning.
CAP said it will mail notices to successful applicants on or before Jan 29. It is scheduled to be listed on the Main Market of Bursa Malaysia on Jan 30.
CAP had raised RM61.2 million in gross proceeds from its IPO. Of the total, RM25 million had been allocated to expand its production centre, RM6.1 million to increase its production capacity, RM6 million for marketing and branding, RM7.2 million for its listing expenses and the remaining RM16.9 million for working capital.
The company said it aimed to solidify its presence in China and expand its distribution to the provinces of Inner Mongolia, Ningxia, Gansu and Xinjian.
“[This is] due to strong encouragement from China’s government to develop automobiles within the country. The Chinese government has 12th five-year plans in place for the expansion of the automobile parts industry into the western regions of China,” it noted.
The company said it expects to undertake preliminary studies to identify business opportunities in the four provinces in the first half of this year and then embark on promoting and distributing its products in the second half.
CAP has also planned to set up a representative office in Malaysia within the next six months. This office is expected to deal with investor relations programmes, interactions with media, fund managers and analysts.
Based in Fujian Province, CAP is principally involved in the manufacturing of automobile chassis components, namely wheel-hub bolts, wheel axles, steel pins, u-bolts, and torque-rod bushings for heavy automobiles.
The company’s products are distributed in 17 provinces in China and exported to Southeast Asia (Malaysia, Indonesia and the Philippines), the Middle East (Dubai and Saudi Arabia) and South Africa via eight trading houses.
For the financial years ended Dec 31, 2009, 2010 and 2011, CAP registered profit after tax of 86.9 million yuan (RM42.4 million), 95.3 million yuan and 132.7 million yuan respectively.
This article first appeared in The Edge Financial Daily, on Jan 23, 2013.