KUALA LUMPUR: Sik Cheong Berhad (“Sik Cheong” or “熾昌有限公司”), a company specializing in the repackaging, marketing, and distribution of RBD palm olein oil, has entered into an underwriting agreement with TA Securities Holdings Berhad (“TA Securities”) for its forthcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
Sik Cheong’s IPO will involve a public issuance of 66.0 million new ordinary shares, representing 24.8% of its enlarged share capital, along with an offer for sale of 20.0 million existing shares, or 7.5% of its enlarged share capital, via private placement to selected investors.
Of the 66.0 million new shares, 13.3 million will be available to the Malaysian public through balloting, 4.0 million shares will be allocated to eligible directors, employees, and contributors to Sik Cheong’s success (“Pink Form Allocations”), and the remaining 48.7 million shares will be reserved for private placement to selected investors.
Under the underwriting agreement, TA Securities will underwrite 17.3 million new shares allocated to the Malaysian public and Pink Form Allocations.
Sik Cheong, through its subsidiaries (collectively referred to as the “Group”), focuses on the repackaging, marketing, and distribution of RBD palm olein oil, a refined, bleached, and deodorized form of palm oil. The Group also trades third-party products, primarily margarine, based on customer requests.
RBD palm olein oil products are the primary revenue driver for Sik Cheong. These products, including cooking oil sold under the in-house brands “Sawit Emas” and “Vitamas,” as well as unbranded options, serve both commercial and household markets. Sik Cheong boasts a customer base of over 500 annual clients, including retailers, wholesalers, hotel and restaurant operators, and food manufacturers. Retail outlets such as wholesale centers, hypermarkets, and supermarkets further extend the reach of Sik Cheong’s products to end consumers. Additionally, the Group markets lamp oil under the “Pingat Emas” brand.
Sik Cheong’s Managing Director, Mr. Wong Hing Ngiap (黄興業), commented, “Sik Cheong operates in a sustainable sector, with RBD palm olein cooking oil being a crucial ingredient in daily food preparation. It offers a cost-effective solution compared to alternatives, making it one of the most consumed cooking oils. With over thirty years of experience and a solid presence in Klang Valley, we are poised for the next phase of growth. We are excited to sign this Underwriting Agreement with TA Securities, marking a significant step towards our listing on the ACE Market of Bursa Securities. This IPO will enhance our corporate profile, financial flexibility, and open new growth opportunities.”
Mr. Wong added, “We take pride in catering to diverse customer needs and industry requirements with various packaging sizes for both household and commercial use. Our commitment to reliable and prompt delivery, within 3 working days, ensures customer confidence and fosters long-lasting business relationships.”
Sik Cheong emphasizes product quality and safety, demonstrated by its MeSTI, HALAL, HACCP (MS 1480: 2019), and ISO 22000: 2018 certifications. These accreditations reflect the company’s adherence to rigorous cleanliness and preparation standards crucial for maintaining high quality in the food industry.
Looking forward, the Group plans to expand its product range to include high oleic soybean oil, a versatile and cost-effective option with a mild flavor that meets the demand for healthier edible oils. The Group also aims to extend its geographical reach beyond Kuala Lumpur and Selangor to neighboring states such as Perak, Negeri Sembilan, Melaka, and Pahang to capture a larger market share.
Sik Cheong is set to be listed on the ACE Market of Bursa Securities by the third quarter of 2024, with TA Securities serving as the Principal Adviser, Sponsor, Sole Underwriter, and Placement Agent for the IPO.