Dolphin's to raise RM31 million from IPO

KUALA LUMPUR: Dolphin International Bhd, which is en route to a listing on the Main Market of Bursa Malaysia, expects to raise RM31.28 million from the issuance of new shares under its initial public offering (IPO).
Dolphin which makes and sells palm oil milling machineries is expected to be listed on the local bourse on June 9, 2015.
The IPO entails an offer for sale of 46 million ordinary shares, of which 15 million shares will be made available to the public, 8.25 million for eligible directors and employees and 22.75 million for selected investors, at an issue price of 68 sen per share.
Upon listing, the group will have a market capitalisation of RM150.96 million.
Based on the net profit for its financial year ended Dec 31, 2014 and the enlarged issued and paid-up share capital upon listing, the company's net earnings per share stands at 5.46 sen. This translates into a net price-to-earnings (PE) multiple of approximately 12.45 times.
Of the total IPO proceeds, RM11 million will be used for facility renovation and extension, including purchase of additional machinery, RM6.08 million for working capital, RM4 million for setting up research and development facilities, RM6 million for the repayment of bank borrowings and the remaining RM4.2 million for listing expenses.
Despite concerns over falling crude palm oil (CPO) prices, group managing director Eric Low Teck Yin believes the company would not be affected by the price volatility, as it sees continuous demand for its business due to the shortage of manpower in the industry.
"Whether the CPO prices go up and down, it will not really affect our business. In fact, every industry needs automation," he said, noting currently it has 3.2% market share in the country.
Speaking at a press conference in conjunction with the company's prospectus launch here yesterday, the company's chairman Datuk Zaiton Mohd Hassan added that the group will also be able to weather any downturn due to the needs of its services and products.
"During down cycles, it is important for the companies to be able to manage its cost production, and this is where Dolphin International comes in. We believe these days, companies are very focused on managing their production cost as well as employees' safety and health," Zaiton added.
Meanwhile, she said the company sees huge market potential in Malaysia and Indonesia, noting there are over 1,000 palm oil mills in the two countries that are not automated or modernised.
"The market potential from these two countries alone is truly substantial," she added, noting the company also sees potential from other upcoming palm oil growing countries such as Latin America.
Besides Malaysia, its products and services are also exported to palm oil millers in Indonesia, Thailand, Myanmar, Papua New Guinea, India and Colombia.