Eureka seeks MAI listing

Eureka seeks MAI listing

Eureka Design Plc, which designs and makes machinery for the automotive industry, plans to list on the Market for Alternative Investment (MAI) in March.

The company will increase capital from the to 85 million baht from 60 million baht by floating 50 million new shares to the public or 29.41% of all shares.

Finnex Advisory is the financial adviser and Finansia Syrus the lead underwriter of the initial public offering (IPO).

The IPO is scheduled for the third week of February, with the IPO price to be set by mid-February.

Narakorn Ratchapolsitte, the chief executive and managing director, said the proceeds will be spent on new technology to increase efficiency of design services and machine production, with a budget requirement of 30 million baht.

About 85% of Eureka's revenue comes from design and machinery production, 10% from machine modifications and 5% from jig designing.

Mr Narakorn said revenue will rise by 30% this year on increasing orders in line with growth in the automobile industry.

The main customers are Honda, Toyota, Yamaha, Isuzu, Suzuki and Mitsubishi.

Eureka achieved revenue of 113 million baht in 2009, 180 million in 2010, 238 million in 2011 and 227 million for the first nine months of last year.

Net profit for these periods was 7.18 million, 6.95 million, 3.89 million and 11.5 million baht, respectively.

While its profit margin increased by 20-35% over the past three years, net profit margin was quite narrow at between 3.8% and 6.4% on machinery purchases, employment and depreciation costs.

These investments were adequate to serve higher demand in the future. but once it can meet increased orders, then net profit growth will be double digit.

"Currently, Thailand is a production base for more than 10 global auto brands. There are more than 1,800 auto parts makers here, about 700 of them in our areas. But we serve only 70 firms now and so have plenty of room to grow," said Mr Narakorn.

"This is the main reason we're seeking a listing on the bourse, our interest costs due to expansion. It will allow us to be more competitive in terms of financial costs, competitiveness and credibility."

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