KUALA LUMPUR: Integrated logistics service provider Sin-Kung Logistics Bhd aims to raise RM26.0 million from its listing on the ACE market.
About RM10 million from the intial public offering (IPO) was earmarked to fund its warehousing and distribution services' expansion to meet the future rising demand from manufacturing and e-commerce sectors.
Managing director Alan Ong said growth in the electrical and electronic (E&E) industry and the exports of E&E products will not only drive the logistics and warehousing industry as a whole, but will particularly benefit the air freight industry as E&E products are generally high-value items and commonly transported through air freight.
"This will in turn create demand for trucking services, including airport-to-airport road feeder services and point-to-point trucking services, to facilitate the movement of E&E products between and to/from airports.
"We are already preparing for the future with the acquisition of our Valdor Office and Warehouse that will add an additional annual capacity of 192,000 pallets, to cater to our customers in the northern region of Peninsular Malaysia when operations begin by the end of 2026. "The Valdor Warehouse is a built-to-suit warehouse. The acquisition will provide us with more storage space in addition to our existing five warehouses to serve more and larger orders from both our existing customers and potential customers, which will lead us to an increase in revenue of our warehousing and distribution services moving forward," said Ong.
As at March 20, Sin-Kung Logistics operates five warehouses, located in Shah Alam and Port Klang, Selangor, Bukit Mertajam, Butterworth and Bukit Minyak, Penang with an aggregate annual capacity of approximately 190,260 pallets.
A further RM2.0 million of the proceeds will be used to purchase 100 commercial vehicles by 2025, as part of its strategy to further expand its trucking and container haulage businesses.
The remainder of the proceeds will be used to repay bank borrowings amounting to RM9.6 million; working capital RM1.1 million and to defray the estimated listing expenses of RM3.3 million.
The company is issuing 200.0 million new shares and an offer for sale of 103.5 million existing shares, representing 16.7 per cent and 8.6 per cent of the enlarged share capital of Sin-Kung Logistics respectively, at an issue price of 13 sen per share.
Based on the enlarged share capital of 1.2 billion shares, Sin-Kung Logistics is expected to have a market capitalisation of RM156.0 million after listing. Sin-Kung is slated to list on the ACE Market on May 15.
