KUALA LUMPUR (May 30): ACE Market-bound gold jewellery wholesaler and manufacturer YX Precious Metals Bhd (YXPM) is seeking to raise RM31.26 million from its initial public offering (IPO).
Notably, YXPM is a wholly-owned subsidiary of Tomei Consolidated.
YXPM managing director Ng Sheau Chyn said the group saw a huge demand for gold jewellery during the pandemic and it intends to increase its product range and establish more business-to-business (B2B) opportunities in the future.
“In terms of market share, currently we are less than 10% and are at approximately 6%.
“I still see we have big opportunities within the local market. So we would like to focus on the lower hanging fruit efforts and getting a higher margin,” she said during the group’s prospectus launch on Monday (May 30).
YXPM mainly serves the Malaysian market as well as exports its products to countries which include Germany, Hong Kong, Indonesia, Myanmar and Singapore.
Its customers are mainly trade customers or intermediaries, such as retailers and wholesalers, as well as jewellery manufacturers.
According to the group, the IPO exercise entails the public issue of 111.65 million new ordinary shares in YXPM, of which Public Investment Bank Bhd has agreed to underwrite 48.38 million shares.
Meanwhile, 18.61 million shares will be made available to the Malaysia public, 11.16 million shares to eligible directors and employees and 18.61 million shares to all entitled shareholders of Tomei.
Of the remaining shares, 16.75 million shares will be privately placed with selected investors and 46.52 million shares will be privately placed to selected Bumiputera investors.
On proceeds from the IPO exercise, a total of RM20.86 million or 66.73% will be allocated for working capital, specifically to purchase raw materials.
RM4.4 million or 14.08% will be earmarked for purchase of new machinery and equipment for expansion of hollow gold jewellery range while RM3.5 million or 11.2% will be used to fund its listing expense.
The remaining RM2.5 million or 7.99% will be utilised for expansion and upgrading of operational facilities.
For the financial year end 2021 (FY21), the group reported a 24.18% decline in its net profit to RM7.1 million from RM9.37 million a year earlier while annual revenue rose by 51.1% to RM265.38 million compared to RM175.63 million previously.
YXPM is principally involved in wholesaling, design and manufacturing of gold jewellery. Its other related products and services include sales of scrap and pure gold bars, manufacture of silver chains, and provision of refining services for precious metals.
The group is slated to make its debut on June 23.
At the IPO price of 28 sen per share, YXPM would have a market capitalisation of RM104.2 million.
Public Investment Bank is the principal adviser, sponsor, underwriter and placement agent for YXPM’s IPO.
