Northeast Aims To Raise RM84.5 Mln From ACE Market IPO

GEORGE TOWN, Sept 26 (Bernama) — Northeast Group Bhd aims to raise about RM84.5 million from its initial public offering (IPO) ahead of its ACE Market listing on October 15.

The precision engineering components manufacturer is issuing 168.99 million new shares at an IPO price of 50 sen per share.

Northeast Group chairman Datuk Seri Lee Kah Choon said the group plans to allocate approximately RM40 million from the proceeds to the construction of a new factory in Penang, which would be its fourth factory.

bootstrap slideshow

“This facility with a total built-up area of 227,687 square feet (sq ft) will be the cornerstone of our next growth strategy, boosting our production capacity to serve our expanding customer base better.

“Additionally, RM12.4 million will be allocated to purchase new computer numerical control (CNC) machines that will enable the group to meet the anticipated increase in orders and better reduce our delivery lead time,” he told reporters after the prospectus launch here today.

Lee said Northeast Group’s presence now extends beyond local borders with more than 70 per cent of its revenue being derived from the overseas market which attest to the quality of its workmanship and adherence to international standards. 

bootstrap slideshow

Furthermore, he said the group have also diversified its product offerings to cover a wide spectrum of industries, namely photonics, electrical and electronics, semiconductor, telecommunication and optoelectronics. 

“The growth in these industries coupled with the increase in outsourcing of manufacturing works, government initiatives as well as the continuous innovation in product development will spur demand for the manufacturing of precision engineering components in the coming years,” Lee said.

According to its prospectus, the group’s business activities are currently carried out at three factories located in Juru and Bukit Minyak, Penang, with a total built-up area of approximately 208,468.19 sq ft, whereby all the production floor space are fully utilised.

Therefore, the group intends to construct a fourth factory in order to continue expanding its business, securing additional orders and growing its customer base.

Construction of the new factory, which could accomodate approximately 200 units of CNC machines, is slated to start at the end of this year while operations would likely begin in the first quarter of 2027.

-- BERNAMA