Solarvest-backed EcoSys aims to raise RM39.3m from ACE Market IPO

KUALA LUMPUR: Penang-based semiconductor services provider EcoSys (Malaysia) Bhd aims to raise RM39.34 million from its initial public offering (IPO) on Bursa Malaysia's ACE Market, priced at 27 sen per share.

According to its prospectus launched today, the corporate exercise comprises entirely new shares with no offer for sale component, meaning existing shareholders will not be cashing out their stakes.

Backed by Solarvest Holdings Bhd, EcoSys primarily fabricates precision engineering components and sub-assembly modules for semiconductor and solar panel manufacturing equipment.

This core segment currently accounts for over two-thirds of the group's annual revenue.

Moving forward, the company has earmarked RM17 million from the IPO proceeds to procure components for the manufacturing of abatement systems—crucial equipment used to treat harmful and toxic gases.

This move is designed to capitalise on the surging global demand for semiconductors.

In its prospectus, Ecosys justifies that the demand for abatement systems will be supported by the growing demand for semiconductors and semiconductor manufacturing equipment as they expand their capacity and comply with environmental measures.

"While we do not enter into long-term supply contracts with our customers, we have received positive indications from our customers on the future demand for abatement systems, driven by their planned facility expansions and the corresponding need for abatement systems," the company states.

Ecosys noted that the relocation of its main operational base to the Simpang Ampat factory has resolved its spatial constraints and allows it to undertake larger manufacturing capacity for its abatement systems.

"In view of that, we intend to allocate additional working capital for the procurement of key components and modules used in the assembly of abatement systems," states Ecosys in the prospectus.

Additionally, RM4.93 million is allocated for machinery acquisition and workforce expansion, while RM1.54 million will be channelled towards scaling its operations in India. This includes the establishment of a new sales and service centre alongside regional recruitment efforts.

The remaining proceeds will be utilised for the repayment of bank borrowings, working capital requirements, and estimated listing expenses.

Upon its scheduled listing on Oct 14, EcoSys is expected to have a market capitalisation of RM154 million based on its issue price, translating to a valuation of approximately 14 times its trailing earnings.

For the financial year 2025, the company posted a net profit of RM11.20 million on the back of RM108.94 million in revenue.

Applications for the public issue will close on Sept 29.

M&A Securities is the principal adviser, sponsor, underwriter, and placement agent for the IPO, while Eco Asia Capital Advisory Sdn Bhd serves as the financial adviser.