PETALING JAYA: Master Tec Group Bhd, a manufacturer of wires and cables, embarked on an initial public offering (IPO) to fuel its ambitious expansion plans.
Executive director and CEO Tee Kok Hwa said it is important for Master Tec to go for an IPO at this juncture to prevent stagnation.
“Without this expansion, MasterTec will be stagnant. Because the market, if you stick with the same product, will stagnate, we won’t grow, so we need to go for IPO.
“If you see our market, every year there is change. We have to grow. Every year we have growth. I will not say every market is already saturated, but to move to the next step, we need to go for medium-voltage (MV) cables. Previously we only supplied low-voltage (LV) cables,” he told SunBiz in an interview.
Master Tec is slated to list on the ACE Market on Monday. Two-thirds of the IPO proceeds will be allocated for construction of two manufacturing plants in Alor Gajah, Malacca, and purchase of new machinery and equipment for expansion into the manufacture of MV power cables.
Master Tec has been operating in the wire and cable industry for about 17 years. Throughout the years, it has established a “MASTERTEC” brand and track record for its LV power cables and control and instrumentation cables.
The company has established manufacturing infrastructure at its factories to produce quality copper-cored and aluminium-cored LV wires and cables. Tee said it is committed to product quality, safety and durability and conducts quality control inspections and tests on the wires and cables manufactured based on its standards and plans.
Master Tec has a quality management policy which it implements strictly and makes sure it is followed in accordance with international standards.
Master Tec has 219 active customers, which range from power utility companies and electrical wholesalers to mechanical and electrical services contractors and project owners.
Its wires and cables are utilised in end-user markets, including power utility, renewable energy, property development and construction, oil and gas, infrastructure, public transport, manufacturing, industrial, commercial and electrical and electronic products.
Its objective is to further grow its position as an established wires and cables solutions provider in the markets that it operates in.
Master Tec’s business and growth strategies include venturing into the manufacturing of MV power cables. It intends to manufacture MV power cables comprising XLPE (cross-linked polyethylene) insulated overhead and underground power cables for power distribution purposes catering to various end-user markets, including but not limited to power utility, solar photovoltaic, industrial parks, commercial buildings and public transport.
Master Tec also aims to expand its market coverage through export sales. Its market expansion strategy is to work with electrical wholesalers that have a strong business network and exposure in overseas countries to increase export sales as well as identify and secure new potential customers. The company’s immediate plan is to focus on existing export markets such as Brunei, Singapore and Thailand.
Meanwhile in a media statement issued on Wednesday, Master Tec said it recorded a profit after tax (PAT) of RM5.775 million for the third quarter ended Sept 30, 2023 (Q3’23) and a PAT of RM19.407 million for the cumulative nine-month financial period ended Sept 30, 2023 (9M23). This was driven mainly by better product mix and higher profit contribution from sales of aluminium-cored wires and cables.
The enhanced profitability has led to improved PAT margins of 8.86% in Q3’23 and 9.55% in 9M23.
