Signature Alliance targets RM161mil from IPO

The Star

14-05-2025

From left: Affin Hwang IB head of equity capital markets Arvin Chia, Signature Alliance Group shareholder Melvin Ng, executive director Mario Foo, group CEO Darren Chang, shareholder Datuk Seri Chiau Beng Teik, shareholder Chiau Haw Choon, M&A Securities managing director Datuk Bill Tan, head of corporate finance Gary Ting, Chin Hin Group group chief financial officer Michael Lim and Signature Alliance Group director Lau Kock Sang.
PETALING JAYA: Interior fit-out solutions provider Signature Alliance Group Bhd (SAG) aims to raise RM161.2mil in proceeds via an initial public offering (IPO) on the ACE Market of Bursa Malaysia on June 5, 2025.
The IPO entails the issuance of 260 million new ordinary shares at an issue price of 62 sen each, valuing the company at an estimated market capitalisation of RM620mil upon listing.
Executive director and group chief executive officer (CEO) Darren Chang said over half of the proceeds would be allocated to developing a new corporate headquarters and production facility in Selangor.
He said this move was necessary considering the existing offices and facilities have been fully utilised.
'One of our key goals is to centralise our office operations, as we currently do not have enough space.
'The funds raised will allow us to bring everyone together under one roof, expand our production facilities and purchase new machinery to increase our production,' he said at a press conference after the launch of SAG's prospectus here yesterday.
The company has earmarked RM88mil, or 54.6% of the total proceeds, for the new corporate and production facility.
An additional RM12mil would be used to establish and expand brand offices in Penang and Johor.
According to Chang, the regional expansion was for capturing business opportunities for interior fitting-out services in the two states as well as strengthening the company's market presence in the northern and southern regions of Peninsular Malaysia.
SAG would also allocate RM30.1mil for working capital requirements and RM4mil for the acquisition of new machinery and equipment.
The remaining proceeds would be used for the repayment of bank borrowings at RM20mil and to cover listing-related expenses at RM7.1mil.
Addressing concerns about the subdued performance of recent ACE Market listings, Chang expressed confidence in SAG's fundamentals and business outlook.
'For the past four financial years ended Dec 31, 2021 (FY21) to FY24 and up to April 16, 2025, SAG has completed 624 interior fitting-out projects with a combined value of RM391.6mil.
'As at April 16, 2025, the company had 69 ongoing projects with a total contract value of RM902.4mil and an unbilled contract value of RM388.6mil or 43.1% of the total value,' he said.
In FY24, SAG posted a net profit of RM40.56mil, an increase from RM10.42mil recorded in FY23. Revenue also more than doubled in FY24, rising to RM386.02mil from RM173.38mil in the previous year.
On external market pressures, particularly tariffs imposed by the United States, Chang noted minimal impact on operations. He attributed this to SAG's reliance on locally sourced raw materials instead of imported.
'And unlike other construction companies, we use different types of materials for our interior fitting-out services,' he added.
SAG specialises in interior fitting-out services and building construction, with Signature International Bhd holding a 50.7% stake and indirectly controlled by construction outfit Chin Hin Group Bhd .
Following the IPO, Signature International's stake would be diluted to 37.5%, while the combined shareholdings of Chang, northern region CEO Foo Khai Shin, and central region CEO Ng Mun Moh would be reduced to 36.5% from 49.3%.
Applications for the shares are open and will close on May 21, 2025 at 5pm.