Malaysian bedroom furniture exporter LY Corp is planning an initial public offering (IPO) on the Catalist board, which will be done through a placement of new shares and vendor shares.

LY Corp designs and manufactures wooden bedroom furniture that is typically rebranded by overseas dealers for sale outside Malaysia. It is controlled by Lian Yu Holdings. The business was founded in Johor in 1976.

LY Corp is raising funds to grow its sales network in China, upgrade machinery and equipment, and acquire new premises near the 15 factories and warehouses it owns or leases. It is building a hostel for its foreign workers, expected to be completed by the first quarter of 2018. It will explore investments, mergers and acquisitions, it said in a draft prospectus lodged on Tuesday.

Net profit in the six months to June 30 rose 21.6 per cent from the same period a year earlier to RM21.6 million (S$7 million) on a 17.2 per cent jump in revenue to RM166 million. This was on the back of higher sales volumes and a rise in average selling price, due to discounts for customers in the same period a year ago, and the strengthening of the US dollar against the ringgit.

Around 80 per cent of the group's revenue is derived from customers in the United States.

The IPO size has not been announced but LY Corp expects profitability in 2018 to be impacted by a leap in administrative costs, including one-off listing expenses. UOB Kay Kian is the sponsor and placement agent.