15/05/2025

BIZ & FINANCE THURSDAY | MAY 15, 2025

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Signature Alliance to raise RM161m from ACE Market IPO

KUCHING: Bank Pembangunan Malaysia Bhd (BPMB) has formalised a strategic financing partnership with Pangolin Resort Sdn Bhd (PRSB) to support the development of the Lundu Beach Resort in Sarawak. The initiative underscores BPMB’s continued commitment in support of the tourism industry to promote Malaysia as a world-class destination and to enhance the country’s competitiveness in the global tourism market. Under this partnership, BPMB is extending a RM33.87 million Tawarruq Asset Financing Facility for Phase 2 of the Lundu Beach Resort, which will include the construction of 72 hotel units and 28 villas, along with a banquet hall, outdoor dining space, and restaurant. The project is expected to elevate Sarawak’s hospitality offerings and contribute to regional economic development. The resort, strategically located in Lundu, is expected to deliver meaningful socio-economic impact to the area, including the creation of 69 employment opportunities—49 during construction and 20 during operations—as well as generating spillover economic effects to nearby towns and small local businesses. The development may benefit up to 300 people in the community, according to estimates. The financing facility was assessed using BPMB’s internal MIND framework (Measuring Impact on National Development), which evaluates alignment with the 12th Malaysia Plan and broader environmental, social and governance (ESG) considerations. KUALA LUMPUR: Interior fitting-out specialist Signature Alliance Group Bhd expects to raise RM161.2 million from the ACE Market listing of Bursa Malaysia. The company plans to use RM88 million (54.6%) of the proceeds raised from the initial public offering (IPO) to establish a new corporate office and production facility in Selangor to increase automation and further strengthen its project delivery capabilities. A further RM30.1 million (18.7%) of the proceeds will be used for working capital purposes to meet the requirements for its interior fitting out projects. The remainder of the proceeds will be used to repay bank borrowings amounting to RM20 million (12.4%), RM12 million (7.4%) to expand and establish branch offices in Pulau Pinang and Johor to strengthen the company’s presence regionally in Peninsular Malaysia, RM4 million (2.5%) to acquire additional machinery and equipment for the production facility, and the remaining RM7.1 million (4.4%) to defray the estimated listing expenses. Executive director and group CEO Darren Chang said with the ongoing growth and expansion of its business, the company intends to centralise offices and production activities for the customisation of carpentry/joinery parts and integral fixtures, and the manufacturing of wooden furniture to improve the overall efficiency of its production process. “Presently, we are unable to customise and manufacture

shipments in the first 10 days of May 2025 by independent cargo surveyors were mixed, with Amspec showing a small growth to 302,908 tonnes (up 1% m-o-m) while Intertek showing a 9% m-o-m contraction to 293,991 tonnes. “While still early days, the absolute exports estimates look muted. May’s export figure may only be 1 million tonnes. At this rate, the Malaysian Palm Oil Board’s (MPOB) May stockpile may hit the psychological 2 million tonnes,” it said. Maybank IB said it keeps its“neutral” stance on the sector as the current CPO spot price of below RM4,000 per tonne is likely to remain until late in the third quarter amid seasonal pick-up in output. Hence, it maintained its forecast of RM4,000 per tonne for 2025. Meanwhile, Kenanga IB said upstream earnings have probably peaked in the first quarter of 2025 or the immediate preceding quarter, while downstream visibility has worsened due to US President Donald Trump’s “Liberation Day” tariffs announcement. “Our 2025 CPO price assumptions and earnings have also been revised downwards. Nonetheless, our revised earnings still look healthy, underpinned by still firm CPO prices due to pending supply deficit in 2025 and potentially in 2026,” it said. Kenanga Research has trimmed its 2025 average CPO price forecast from RM4,200 per tonne to RM4,100 per tonne while maintaining 2026 CPO price at RM4,000 per tonne on faster than-expected reversal in palm oil price premium to soyabean in April and softer bio-diesel demand due to more competitive hydrocarbon oil prices following Opec+ production ramp up. – Bernama eligible directors, employees of Signature Alliance and persons who have contributed to the success of the company under the Pink Form Allocations while 20 million new shares are reserved for application by the entitled shareholders of Signature International Bhd under the restricted offering. The remaining 160 million new shares will be placed out to Bumiputera investors approved by the Ministry of Investment, Trade and Industry and selected investors. At an IPO price of RM0.62 per share, Signature Alliance’s market capitalisation is projected to be RM620 million, based on its enlarged share capital of 1 billion shares. The IPO is open for subscription until May 21, 2025. Signature Alliance’s listing on the ACE Market of Bursa Securities is tentatively scheduled for June 5, 2025. M&A Securities Sdn Bhd is the adviser, sponsor, managing underwriter, joint underwriter and joint placement agent, while Affin Hwang Investment Bank Bhd is the joint underwriter and joint placement agent for the IPO exercise.

The stockbroking firm also forecast crude palm oil (CPO) production to grow by 4% m-o-m to 1.75 million tonnes and palm oil exports to increase by 8% m-o-m to 1.19 million tonnes. “However, according to Intertek, Malaysian palm oil exports fell 9% m-o m to 293,911 tonnes in the first 10 days of May, reflecting a slow start to the month. “The recent 22% decline in CPO prices to RM3,787 per tonne from a peak of RM4,835 per tonne on April 2 reflects concerns over weaker crude oil prices and the 10% reciprocal import tariff imposed by the US on Malaysia and Indonesia, which makes palm oil less competitive in the US market,” it said in a note yesterday. Meanwhile, palm kernel prices have also remained firm at RM3,421 per tonne, representing 90% of CPO prices and indicating a shortage of coconut oil. Thus, CIMB Securities projected CPO prices to remain in the range of RM3,700-4,000 per tonne in May, given rising supply. It also maintained its average CPO price forecast of RM4,200 per tonne for 2025, supported by Indonesia’s biodiesel mandates and limited expansion in palm oil planting areas. However, it downgraded the plantation sector rating to “neutral” following the recent downgrade of SD Guthrie to “hold” due to limited near term catalysts, with IOI Corp remaining its preferred “buy” in the sector. Maybank Investment Bank Bhd (Maybank IB) and Kenanga Investment Bank Bhd (Kenanga IB) also gave the sector a “neutral” rating. RM388.6 million, or 43.1% of the total value. For the financial year ended Dec 31, 2024 (FY24), Signature Alliance net profit jumped 290.4% to RM40.6 million from RM10.4 million a year ago (FY23) on higher gross profit and net gain on impairment of financial assets and contract assets. FY24’s revenue rose 122.6% to RM386 million from RM173.4 million in FY23. During the period, the company’s gross profit expanded to RM81.7 million, translating to a margin of 21.2%, versus 16.9% in FY23, due to a mix of contributions from interior fitting-out projects with higher gross profit margins. Net profit margin for FY24 also improved to 10.5% from 6% a year ago. Under the listing exercise, Signature Alliance is issuing 260 million new shares representing 26% of its enlarged share capital. There is no sale of existing shares. Out of the 260 million new shares, 50 million new shares will be made available to the Malaysian public via balloting; 30 million new shares for its

o Company to invest RM88m in new Selangor facility to enhance automation and strengthen project delivery

construct its production facility, and upon commencing operations of this new facility, it intends to produce all carpentry/joinery parts, integral fixtures, and wooden furniture required internally for all projects undertaken in Peninsular Malaysia. “Similarly, the new corporate office will enable us to centralise our staff force in Klang Valley under one location and provide space for future hires in line with our expected business growth,” Chang said. For the past four financial years (FY) ending Dec 31, 2021, to Dec 31, 2024, and up to April 16, 2025, Signature Alliance has completed 624 interior fitting-out projects with a combined value of RM391.6 million. As of April 16, 2025, the company has 69 ongoing projects with a total contract value of RM902.4 million and an unbilled contract value of

sufficient carpentry and joinery parts, integral fixtures, and wooden furniture for all of our existing projects using our own production facilities. “This is primarily due to the growing number of interior fitting out projects we continue to secure and deliver, each requiring varying degrees of customisation. “Additionally, the differing profiles and specifications of the carpentry, joinery parts, fixtures, and wooden furniture needed for each project further strain our production capacity. “These challenges are compounded by the space constraints in our existing facilities, which limit our ability to scale up manufacturing to meet demand effectively,” Chang said. He said the company intends to

BPMB provides financing facility for second phase of Lundu Beach Resort

Palm oil stocks set to rise 15% in May KUALA LUMPUR: Malaysian palm oil stocks are expected to rise 15% month-on-month (m-o-m) in May 2025 to 2.15 million tonnes, driven by higher output, according to CIMB Securities Sdn Bhd. Maybank IB noted that preliminary Malaysia export estimates for

Wee (left) and Lau exchange documents after signing the Lundu Beach Resort financing agreement.

“The Lundu Beach Resort will not only showcase the beauty of Sarawak’s coastline, but also serve as a catalyst to boost tourism, stimulate local economic activity, and create meaningful opportunities for the surrounding communities.” With this collaboration, BPMB continues to deliver impact capital into projects that not only generate economic value but also uplift local communities and strengthen the nation’s tourism ecosystem. The Lundu Beach Resort stands as a testament to what purposeful financing can achieve when aligned with national priorities and local aspirations.

The project scored highly under the Development Impact Index, particularly for its potential to stimulate job creation, promote sustainable tourism, and uplift the local community. BPMB head of corporate banking and advisory Wee Yee Tat said, “This project aligns with our mandate, and more importantly, it addresses key socio-economic goals by creating jobs, supporting local businesses, and enhancing the standard of living in Lundu.” PRSB director Datuk Seri Thomas Lau said, “We are honoured to work alongside BPMB in bringing this vision to life.