Sik Cheong Berhad (“Sik Cheong”), a prominent player in the repackaging, marketing, and distribution of RBD palm olein oil products, has launched its prospectus today for an initial public offering (IPO) on the ACE Market of Bursa Malaysia Securities Berhad. The company, operating through its subsidiaries, specializes in refined, bleached, and deodorized palm oil products marketed under brands such as “Sawit Emas,” “Vitamas,” and “Pingat Emas,” alongside third-party products like margarine upon customer demand.
With over three decades of experience, Sik Cheong serves a diverse clientele including retailers, wholesalers, hospitality sectors, and food manufacturers, with notable long-term relationships such as The Chicken Rice Shop Restaurant Sdn Bhd and NSK group of companies.
Managing Director Mr Wong Hing Ngiap highlighted the essential role of RBD palm olein cooking oil in Malaysian cuisine, noting its dominant market share in the country’s vegetable oil consumption, which accounted for 76.7% in 2023. Anticipating further growth, Sik Cheong plans to leverage IPO proceeds to expand its operations significantly. This includes rebuilding Factory No. 9 to enhance packaging capabilities, particularly for a new high oleic soybean oil product line, and acquiring modern machinery and equipment.
Strategically, Sik Cheong aims to broaden its market reach beyond Kuala Lumpur and Selangor into neighbouring states such as Perak, Negeri Sembilan, Melaka, and Pahang, supported by an expanded fleet of delivery trucks to ensure efficient distribution.
The IPO targets to raise RM17.8 million, with allocations earmarked for facility expansion (40.3%), new delivery trucks (5.0%), working capital (33.4%), and listing expenses (21.3%). The public offering comprises 66.0 million new shares (24.8% of enlarged share capital) and 20.0 million existing shares (7.5%), including private placements.
Financially, Sik Cheong reported robust revenue growth from RM42.6 million in FYE 2021 to RM79.6 million in FYE 2024, with a compound annual growth rate (CAGR) of 23.2%. Profit after tax also demonstrated strong growth, achieving a 50.6% CAGR over the same period, totalling RM6.3 million in FYE 2024.
Applications for the IPO are open until 30 July 2024, with Sik Cheong scheduled for listing on 13 August 2024. TA Securities Holdings Berhad serves as the Principal Adviser, Sponsor, sole Underwriter, and Placement Agent for the IPO exercise, underlining confidence in Sik Cheong’s market debut.
