ACE market listing bodes well for CNERGENZ's future objectives, strategies

05 May 2022 | NST Business

CNERGENZ is now well-positioned to benefit from the global demand for electronics and semiconductor products as the world adapts to the increasing demand for E&S products.

KUALA LUMPUR: CNERGENZ Bhd's upcoming ACE market listing bodes well for its future objectives and strategies, including expanding its production facilities to create and offer a wider variety of manufacturing solutions.

Further, the listing will also build up the company's research and development (R&D) activities for smart factory solutions, an area in CNERGENZ that sees strong growth due to the demand for automated smart manufacturing.

Chief executive officer and executive director Lye Yhin Choy said the primary focus post-listing would be to expand market share by offering new and innovative solutions and expanding the facility in Penang to cater to growing operational needs.

"We also intend to diversify our smart factory solutions offerings to capitalise on the demand for smart manufacturing automation, thus growing our footprint in Southeast Asia," he told The New Straits Times.

Lye said CNERGENZ is now well-positioned to benefit from the global demand for electronics and semiconductor (E&S) products as the world adapts to the increasing demand for E&S products, fuelled by the use and increasing adoption of artificial intelligence (AI), big data analytics, electric vehicles (EV) and Internet of Things (IoT) devices.

He said such demand would continue to drive the Fourth Industrial Revolution (IR 4.0) with solid E&S components and parts consumption.

"We plan to grow our smart manufacturing factory solutions to complement our surface mount technology (SMT) manufacturing, as our solutions will provide customers with modern, efficient and lower manufacturing costs.

"Our advantage lies in our expertise and extensive understanding of SMT manufacturing processes that we acquired

over the years and from servicing multi-sectors of the E&S space," he said.

Lye said the listing is an affirmation of how far the company have come since 2004 since the setup of SiP Technology Sdn Bhd in Penang.

Lye also pointed out that CNERGENZ's business outlook is positive, as the company is well-positioned to benefit from the growth trends in demand for SMT manufacturing solutions within the region.

Based on the industry overview in the recently-launched prospectus, the global industry size for SMT manufacturing solutions has grown at a compound annual growth rate (CAGR) of 6.4 per cent or from US$3.0 billion (RM12.4 billion) in 2016 to

US$4.1 billion (RM17.0 billion) in 2021.

The market for such solutions in Malaysia has grown at a CAGR of 7.7 per cent from US$45.6 million (RM189.0 million) in 2016 to US$57.0 million (RM236.1 million) in 2019, while Southeast Asia's CAGR was at 6.3 per cent, from US$296.0 million (RM1.2 billion) in 2016 to US$355.5 million (RM1.5 billion) in 2019.

CNERGENZ plans to raise RM58.0 million from its initial public offering (IPO) exercise. In addition, the company will utilise RM37.8 million to expand the facility, RM6.0 million for R&D expenditure and RM10.0 million for working capital.

Lye said that although the proceeds from the IPO will be used primarily to expand the business, the listing will provide CNERGENZ with the visibility and market presence necessary to compete and grow its market share in the E&S sector in Malaysia, Thailand, and Vietnam, where the company is well-positioned to benefit from growing electronics and semiconductor exports.

Chief operating officer and executive director Kong Chia Liang said the company started as a provider of integration services for surface mount technology (SMT) machinery and equipment, which has since grown to the full-scale integrated solutions to electronics manufacturing services providers (EMS) that cater to the electronics and semiconductor (E&S) industries.

"We also began incorporating smart manufacturing solutions to our product offerings in 2018, covering the full automation process, i.e. front-end to back-end manufacturing.

"Today, our principal markets are Malaysia (apart from Melaka and Johor), Thailand and Vietnam, whereby these three countries are the main E&S manufacturing hubs within Southeast Asia," he said.

Kong said CNERGENZ's customer base comprises integrated device manufacturers (IDM), outsourced semiconductor assembly and test service (OSAT) providers and electronics manufacturing service (EMS) providers primarily operating in the E&S industries, some of which are multinational companies, including the company's top five customers.

The top five companies are ASM Assembly Systems Singapore Pte Ltd in Singapore, ITW EAE A Division of Illinois Tool Works, Inc in the United States, Koh Young Technology Inc based in South Korea, INERTEC Lottechnik GmbH and Kolb Cleaning Technology GmbH, both based in Germany.

"We are always looking to expand the customer base with our efforts to offer comprehensive solutions that can cater to a wide range of industries," Kong said.

- END -


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