A Malaysian maker of aerosol spray paints used on motorcycles has become the first initial public offering (IPO) launched on the Singapore Exchange this year.
Samurai 2K Aerosol offered 20 million new shares at 20 cents each, via a placement, seeking to raise about $2.35 million in net proceeds. There was no public tranche and the placement has been fully subscribed, said founder and chief executive Ian Ong.
Trading is expected to commence on Monday.
At 20 cents a share and with a post-IPO share capital of 100 million, Samurai 2K will have a $20 million market value upon listing.
Post-IPO, Mr Ong, along with his brother, sister and wife Kelly Lim, who is the chief operating officer, will control 68 per cent of the firm.
Of the funds raised, $1.2 million will be used to upgrade the group's Johor plants and increase the number of production lines, as well as to buy new equipment to reduce the firm's reliance on labour. The remaining $1.15 million will be set aside as general working capital.
Samurai 2K sells aerosol spray paints to the DIY (do it yourself) motorcycle refurbishing market under the "Samurai" house brand. The spray cans are sold mainly in Malaysia, Indonesia, Thailand and the Philippines.
In 2015, 14.3 million cans of aerosol spray paints for motorcycles were sold in Malaysia, with Samurai 2K accounting for 27 per cent of the market share. Samurai's competitors include DPI, Nippon Paint and Aeromix Distribution. In Indonesia, some 58 million cans were sold, and Samurai 2K had a 5 per cent market share.
"The total two-wheeler population is projected to grow," said Mr Ong, 47. "We have an attractive end-user market and a long relationship with our suppliers and customers."
Although it is technically possible for a customer to paint a whole car using 36 spray cans, Mr Ong said the group has no immediate plans to move into the car market.
It posted a RM5.4 million (S$1.7 million) net profit in the 12 months ended last March 31, up from RM1.9 million in the same period a year earlier. Revenue was RM30.6 million, up from RM19.1 million.
But in the first quarter ended June 30 last year, the group posted a net profit of RM291,000, down 67 per cent year on year.
The profit fall came on the back of a 236 per cent jump in administrative expenses, which rose to RM2.3 million on higher staff costs and a RM1 million hike in legal and professional fees, including listing expenses.
Total listing expenses will amount to some $1.65 million, the group said. UOB Kay Hian is the issue manager, sponsor and placement agent.
Correction note: The original version of the story misstated the number of cans sold by the company in 2015. We apologise for the error.