F-1/A: Linkers Industries Limited Files for IPO on Nasdaq Capital Market

Linkers Industries Limited, a British Virgin Islands-based holding company with wire/cable harness manufacturing operations in Malaysia, has filed an amended registration statement for its initial public offering on the Nasdaq Capital Market.

Summary

• Linkers Industries Limited is planning an initial public offering of 2,200,000 Class A Ordinary Shares.
• The company intends to list its shares on the Nasdaq Capital Market under the symbol LNKS.
• The offering price is expected to be between US$4 and US$6 per share.
• Following the offering, public shareholders will hold 16.36% of the issued and outstanding Ordinary Shares, assuming the underwriters do not exercise their over-allotment option.
• Mr. Man Tak Lau, the controlling shareholder, will own 61.93% of the total issued and outstanding Ordinary Shares, representing 91.60% of the total voting power after the offering, assuming no exercise of the over-allotment option.
• The company is both an emerging growth company and a foreign private issuer, which allows for reduced public company reporting requirements.
• The company expects total cash expenses for the offering to be approximately US$1,327,331, exclusive of underwriting discounts and non-accountable expense allowance.
• The underwriters have a 45-day option to purchase up to 15% of the total number of Class A Ordinary Shares offered, solely for covering over-allotments.
• The company plans to use approximately 30% of the net proceeds for potential acquisitions or joint ventures, 20% for purchasing machinery/equipment, 10% for marketing and setting up global sales offices, and 40% for funding working capital.

Sentiment

Score: 5

Explanation: The document presents both positive aspects (growth strategies, competitive strengths) and negative aspects (risks, financial performance decline). The sentiment is neutral, reflecting an objective assessment of the company's prospects.

Positives

• The company has a customer base in diversified industries and long-term business relationships 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 strong customized production platform.
• The company has an experienced management team with extensive knowledge of the manufacturing industry where it operates.

Negatives

• The company will be a controlled company, which may reduce corporate governance standards.
• 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 investors could lose all or part of their 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 experience labor shortage or unrest or may incur high labor costs.
• 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 strengthen its market position by upgrading production capacity, diversifying its customer base, enhancing its capabilities, and pursuing acquisitions or joint ventures.

Management Comments

• The management monitors the cash position of its subsidiaries regularly and prepares budgets on a monthly basis to ensure it has the necessary funds to fulfil its obligations for the foreseeable future and to ensure adequate liquidity.

Industry Context

The company operates in the wire/cable harnesses industry, serving customers in the home appliances, industrial products, and automotive sectors, primarily in the Asia Pacific region. The industry is influenced by the growth of these sectors and trends such as smart homes and electric vehicles.

Comparison to Industry Standards

• The prospectus references an industry report by Ken Research Private Limited, providing market data and forecasts for the major appliances market in the Asia Pacific region and Western Europe, as well as the wire/cable harnesses market in Malaysia.
• The major appliances market in the Asia Pacific region is expected to grow at a CAGR of 6.2% between 2022 and 2027, reaching US$199.3 billion in 2027.
• The major appliances market in Western Europe is expected to grow at a CAGR of 2.2% between 2022 and 2027, reaching US$38.5 billion in 2027.
• The wire/cable harnesses market in Malaysia is expected to grow at a CAGR of 7.9% between 2022 and 2027, reaching US$982.1 million in 2027.

Stakeholder Impact

• Shareholders face risks related to the company's dual-class voting structure and potential volatility in the market price of Class A Ordinary Shares.
• Employees may be affected by potential labor shortages or unrest.
• Customers may be impacted by the company's ability to acquire raw materials or fill orders in a timely and cost-effective manner.
• Suppliers may be affected by changes in the company's procurement arrangements.

Next Steps

• The company intends to apply to list its Class A Ordinary Shares on the Nasdaq Capital Market.
• 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, Class A Ordinary Shares, wire/cable harnesses, Linkers Industries Limited, Nasdaq, manufacturing, Malaysia, offering