KUALA LUMPUR: Lim Seong Hai Capital Bhd (LSH Capital) has made its listing debut on the LEAP Market today, marking the first step to prepare it for an eventual listing transfer to the bigger markets on Bursa Malaysia.
LSH Capital said the listing was also to honour its origins and the memory of Tan Sri Lim Keng Cheng (non-executive chairman) and his three siblings' late father.
His siblings are LSH capital executive vice chairman Datuk Lim Keng Guan, group managing director Lim Pak Lian, and managing director (machinery, hardware and tools division) Lim Keng Hun.
Lim Keng Cheng said this was an important day for the Lim family as it finally realised its dream to list the business that was founded in 1995 and 1999 for Lim Seong Hai Lighting and Knight Auto respectively.
"We always remember our late father's teachings, which is to always have gratitude towards your origins and walk step-by-step towards your success.
"There's no shortcut in doing business. We can assure our investors that this is only the beginning of many good things to come," he said in a statement today.
Lim said traditionally, family-owned companies tend to seek listing to raise funds or recognition from the general public.
But for LSH Capital, the aim is to provide assurance and show appreciation to loyal customers that have been with the company through the years.
"Even for something as small as product warranties or after sales service, the Group places its customers first and believes it is the way forward in gaining confidence with its present and future clients," he added.
At the opening bell today, LSH Capital's shares opened at 26 sen, which was a 13 sen premium or 100 per cent higher than its initial public offering (IPO) price of 13 sen per share, with the first traded volume recorded at 1.1 million shares.
The IPO involved the listing of the company's entire issued share capital of RM36.58 million, comprising 355.05 million shares.
The promoters of the listing were Keng Cheng, Keng Guan, Pak Lian, Keng Hun (four promoters), and Lim Seong Hai Resources Sdn Bhd, collectively.
The listing is implemented by way of introduction and did not entail any fund-raising exercise.
It only involved the issuance of 35.86 million new shares to the pre-listing investors at the subscription price of 13 sen per share, which raised a total proceeds of RM4.66 million.
Astramina Advisory Sdn Bhd is the approved adviser and continuing adviser for the listing.
The four promoters will own a collective 62.34 per cent indirect stake in LSH Capital through Lim Seong Hai Resources.
Lim Seong Hai Resources is wholly-owned by Lim Seong Hai Holdings Sdn Bhd, which is owned by the four promoters with 25 per cent stake each.
The four promoters will also hold a 6.89 per cent stake each in the listed entity, which means the Lim family will eventually own a total stake of 89.90 per cent.
LSH Capital has secured orders worth about RM69.7 million for the provision of lightings products, related mechanical and engineering (M&E) products and services, as well as building materials and rental of machinery for LSH33.
Of the figure, RM63.2 million is expected to be recognised in the company's revenue for the period up to year 2024.
LSH33 is a mixed property development project situated in Sentul, which has direct access to the Duta-Ulu Kelang Expressway (DUKE).
Through its subsidiaries, namely Lim Seong Hai Lighting and Knight Auto, LSH Capital is principally involved in the provision of building materials, lighting products, and related M&E products and services, hardware and tools, as well as rental of machinery.
The company registered a revenue of RM48.12 million for the year ended September 30, 2020, with a net profit of RM4.14 million.
For the first six months ended March 31, 2021, it registered a revenue of RM41.61 million with a net profit of RM5.56 million.
"We currently operate from one head office, eight retail stores and one warehouse in the Klang Valley. We intend to set up two additional Lim Seong Hai Lighting retail stores and three additional Knight Auto retail stores in Kuala Lumpur by 2024.
"The total estimated cost of setting up these five additional retail stores is about RM12.7 million. This will be partially funded by the proceeds generated from the Pre-Listing Investors," he said.
Lim said the company had observed considerable growth from its e-commerce sales over the past few years, partially owing to the push for online shopping due to the Covid-19 pandemic.
The next step, Keng Cheng said, was to further digitising its operations, in particular the order and delivery processes of building materials, as well as allocating more resources to e-commerce for the retailing of lighting products, hardware and tools