F-1/A: Linkers Industries Limited Files Amendment No. 3 to Form F-1 Registration Statement for Proposed IPO

Linkers Industries Limited has filed an amendment to its Form F-1 registration statement, outlining details for its proposed initial public offering and subsequent resale of Class A Ordinary Shares.

Summary

• Linkers Industries Limited, a BVI-registered holding company with wire/cable harness manufacturing operations in Malaysia, has filed Amendment No. 3 to its Form F-1 registration statement.
• The document details the proposed initial public offering (IPO) of 2,200,000 Class A Ordinary Shares, representing 16.36% of the outstanding shares after the offering, with an expected price between US$4 and US$6 per share.
• Selling shareholders also plan to offer 2,200,000 Class A Ordinary Shares through a Resale Prospectus.
• The company intends to list its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol LNKS.
• Post-offering, Mr. Man Tak Lau, the controlling shareholder, will own 61.93% of the company's shares and 91.60% of the voting power, assuming no exercise of the over-allotment option.
• The document highlights various risk factors associated with investing in the company, including those related to doing business in Malaysia, the company's business and industry, its corporate structure, and the Class A Ordinary Shares themselves.
• The company qualifies as an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.
• The company plans to use the net proceeds from the offering for potential acquisitions, purchasing machinery/equipment, marketing promotion, and funding working capital.
• The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

Sentiment

Score: 5

Explanation: The document presents a mix of positive and negative aspects. While the company has growth strategies and competitive strengths, it also faces risks and challenges, including a recent decrease in revenue and a net loss.

Positives

• The company has a customer base in diversified industries and long term business relationship with renowned global brand name manufacturers and OEMs.
• The company has extensive understanding of wire harness production process, up to date machinery and efficient management resulting in competitive pricing while maintaining quality.
• The company has a high standard and commitment to quality control.
• The company has a strong customized production platform.
• The company has an experienced management team with extensive knowledge of the manufacturing industry where it operates.

Negatives

• The company is a controlled company, which may lead to certain corporate governance exemptions.
• The company relies on a limited number of major customers.
• The company's Class A Ordinary Shares are expected to initially trade under US$5.00 per share and thus would be known as penny stock.
• The market price of the company's Class A Ordinary Shares may be highly volatile, and you could lose all or part of your investment.

Risks

• The company's operations are subject to various laws and regulations in Malaysia.
• Fluctuations in the prices of major raw materials could materially and adversely affect the company's business, financial conditions and results of operations.
• An unanticipated or prolonged interruption of operations at the company's production facility would have a material and adverse effect on the company's business, financial conditions and results of operations.
• The company may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
• The war in Ukraine could materially and adversely affect the company's business and results of operations.

Future Outlook

The company aims to upgrade and increase its production capacity, strengthen its sales and marketing efforts, enhance its capability level, and pursue acquisitions and/or joint ventures.

Industry Context

The document references industry data and forecasts from Ken Research Private Limited regarding the wire/cable harnesses market in Malaysia and the major appliances market in the Asia Pacific region and Western Europe.

Related Party Transactions

• The document discloses several related party transactions, including sales, purchases, loans, and IT support fees with entities such as TEM Electronics (Jiangmen) Co Ltd, SEAP Trading Pte Ltd, BAP Trading Co Ltd, and New Universe Industries Ltd.

Stakeholder Impact

• The document outlines potential impacts on shareholders, including dilution, volatility in share price, and the controlling shareholder's influence.
• The document also discusses the impact of COVID-19 on the company's business, financial condition, and results of operations.

Next Steps

• The company intends to apply to list its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol LNKS.
• The company plans to use the net proceeds of this offering as follows: Approximately 30% for potential acquisition of companies and/or formation of joint ventures within the value chain of the wire/cable harnesses industry; Approximately 20% for purchase of machinery/equipment; Approximately 10% for marketing promotion and setting up global sales offices, in particular in the U.S.; and Approximately 40% for funding working capital.

Key Dates

Keywords

IPO, initial public offering, Class A Ordinary Shares, Linkers Industries Limited, wire/cable harnesses, Nasdaq, Resale Prospectus, manufacturing, Malaysia, BVI