Enhancing Capabilities to Meet Rising Demand for M&E Services
PETALING JAYA: The Malaysian mechanical and electrical (M&E) engineering services sector continues to show promising growth, driven by increasing foreign and domestic investments that lead to a rise in commercial and industrial properties.
Further, the long-term development of key end-user industries, particularly data centres, where CBH Engineering Holding Bhd holds a proven track record, places the group in a strategic position to benefit from these market dynamics.
CBH Aims to Strengthen Its Internal Capabilities
To meet the rising demand, CBH aims to strengthen its internal capabilities by recruiting more skilled professionals to enhance its operational efficiency and ensure the delivery of innovative and high-quality engineering solutions. Simultaneously, CBH is focused on strengthening its financial resources to support the working capital required for larger and more complex M&E engineering projects.
CBH’s Prospective Listing
Launching its prospectus in conjunction with its upcoming initial public offering (IPO) in Kuala Lumpur, CBH’s managing director Cheah Boon Hwa stated that the company’s upcoming listing on the ACE Market of Bursa Malaysia represents a transformative step. This will enable the company to strengthen its operations, expand its team, and seize new opportunities within the growing M&E engineering services industry.
CBH’s Services
CBH provides electrical and M&E services, including designing, installing, testing, and maintaining electrical systems across various voltage levels and mechanical systems like air conditioning and mechanical ventilation, fire protection, plumbing, and renewable energy. The group has a diverse portfolio of projects, including substations, commercial properties such as data centres, shopping malls, hotels, office towers, industrial properties such as factories and warehouses, and high-rise residential properties.
Financial Growth
CBH has showcased strong financial growth from the financial years ended Dec 31, 2021 (FY21) to FY23, achieving a two-year net profit compound aggregate growth rate of 203.8%, rising from RM3.6 million to RM33 million. This was underpinned by revenue growth from RM67.6 million to RM208.0 million over the same period.
Unbilled Order Book and Tender Book
For the eight-month period ended Aug 31, 2024 (FY24), CBH reported a net profit of RM30.7 million and revenue of RM178.2 million, reflecting increases of 150.9% and 126.3%, respectively, against FY23. The company’s unbilled order book stood at RM203.7 million and tender book valued at RM559.7 million as of Nov 25, 2024.
IPO Allocation
The bulk of the RM83.4 million to be raised through the IPO will be allocated for business expansion purposes. Specifically, RM38.5 million (46.2%) will be earmarked for the procurement of equipment and components for future projects, while RM17.3 million (20.7%) will be allocated to bank guarantees for future projects. Additionally, RM18.5 million (22.2%) will be used towards the payment to subcontractors for future projects, while RM3.5 million (4.1%) will be set aside towards the recruitment of engineers and other personnel. The remaining RM5.7 million (6.8%), will be used to defray listing expenses.
Conclusion
CBH’s IPO represents a transformational step for the company, enabling it to solidify its reputation as a trusted and leading service provider in the M&E engineering sector. With an enlarged issued share capital of 1,880.9 million shares and an IPO price of 28 sen per share, CBH will have a market capitalization of RM526.7 million upon listing.
Frequently Asked Questions
- What is the purpose of CBH’s IPO?
The IPO will enable CBH to strengthen its operations, expand its team, and seize new opportunities within the growing M&E engineering services industry. - What is the primary use of the proceeds from the IPO?
The bulk of the proceeds will be allocated for business expansion purposes, including the procurement of equipment and components, bank guarantees, and payment to subcontractors. - What is CBH’s performance in terms of financial growth?
CBH has showcased strong financial growth, achieving a two-year net profit compound aggregate growth rate of 203.8% and revenue growth from RM67.6 million to RM208.0 million over the same period.