KUALA LUMPUR: En route to being listed on the ACE Market of Bursa Malaysia Securities, KHPT Holdings Bhd is focused on maintaining consistent earnings growth and dividend payouts to shareholders.

Group managing director Datin Eloise See said the company wants to ensure consistent annual payouts and steadily growing revenues.

“It may not be dramatic, but it’s reliable. That is why, when we prepared for the initial public offering (IPO), I insisted on implementing a dividend policy with at least a 10% payout. The projects we started today may have been in the pipeline for over a year before production.

“We want to avoid surprising our shareholders with drastic fluctuations, where one moment they are excited, and the next they are disappointed. That is different from the approach we believe in. For shareholders or potential investors, we want them to see us as a long-term investment opportunity. Sometimes, it takes time, but the returns accumulate, which is what we strive for,” she told SunBiz.

When asked how the automotive parts manufacturing sector is adapting to the evolving landscape with the rise of electric vehicles and the modernisation of combustion engine cars, See said as a manufacturer of automotive parts for the Malaysian market, KHPT focuses on the affordable segment, primarily supplying local original equipment manufacturers (OEM) such as Proton and Perodua.

“While Proton and Perodua are in the early stages of exploring new vehicle launches, our positioning is based on the essential components we specialise in, such as body structures, car seats, and absorbers. Whether a car is powered by petrol, electricity, hybrid, or hydrogen, these parts remain crucial for all models.

“We have years of experience ensuring that our parts remain relevant and necessary, as every car, regardless of its power source, requires body reinforcement and suspension systems,” See said.

She said another key aspect of KHPT’s strategy is the company’s positioning as both a Tier 1 and Tier 2 supplier.

As a Tier 1 supplier, it provides parts directly to Proton and Perodua, while as a Tier 2 supplier, the company supplies parts to other Tier 1 suppliers, who assemble and deliver them to the OEM.

“For example, when Perodua launches a new model, they may award us a specific section to supply. However, because we also operate as a Tier 2, we can supply parts to other Tier 1 suppliers, giving us multiple opportunities to be involved in different sections of the same vehicle.

“This diversification helps spread risk and balances our revenue streams, with around 25% of our income coming from each of our top five clients. If one Tier 1 supplier underperforms, other suppliers, including us, can pick up the additional work, keeping the supply chain balanced.

“We remain focused on the local OEM market, which still represents 60% of Malaysia’s total industry volume (TIV), specifically in the affordable segment. Additionally, we operate on a six-month rolling forecast provided by the OEMs, allowing us to plan and manage our resources effectively.

“This ensures that we avoid overstocking or understocking and maintain operational efficiency without fluctuations in demand negatively affecting us,” See said.

The automotive parts supplier, which is raising RM21.73 million through its IPO, is scheduled to be listed today.

The IPO is priced at 20 sen per share, offering 108.64 million new shares to the public. This will give the company an estimated market capitalisation of RM80.48 million, based on its expanded share capital of 402.39 million shares.

The bulk of the IPO proceeds will be channelled towards business expansion, with 75.3% earmarked for capital expenditures. This includes 50.8% for acquiring press machines to boost manufacturing capacity and 20.7% for automation equipment to enhance efficiency. The remaining funds will be used to purchase an overhead crane, renovate the factory, cover working capital needs, and handle expenses related to the listing.

KAF Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for KHPT’s IPO.