Shin Yang on course to expanding business

Miri-based Shin Yang Shipping plans to use money raised from its IPO to buy seven vessels for operations in Malaysia and the Middle East

Shin Yang Shipping Corp Bhd plans to use money raised from its initial public offering (IPO) to buy new ships and expand its shipbuilding business.

The Miri, Sarawak-based group wants to buy seven new vessels for operations in the country and the Middle East and to set up shipbuilding and repair operations in the United Arab Emirates.

It also plans to expand its existing shipyard in Sarawak as well as build a shipyard in the Hulayla Industrial Park in Ras Al Khaimah (RAK), one of the emirates in the United Arab Emirates.

"The shipping business is a growing business globally and we want to gain overseas recognition through this listing and be able to export the vessels internationally," its group managing director Ling Chiong Sing said at a press conference at its prospectus launch in Kuala Lumpur yesterday.

Shin Yang, which was set up in 1983, operates various types of vessels, including tugboat, barge, container, landing craft, cargo, mini oil tanker and crew boat.

The group has some 58 customers across 15 countries, including Singapore, Thailand, the Netherlands and Australia.

It provides services to end-user industries, such as timber operations, wood-based product manufacturing, shipowners, and offshore oil and gas service providers.

"We are very occupied with businesses for the next two years. Our shipyard book order is RM180 million for shipbuilding for an external party and RM500 million for our own shipping operations."

Some 63 per cent of the group's revenue comes from shipping services, 24 per cent from shipbuilding, and the rest from ship-repair and metal fabrication.

Under its IPO, it will offer 176.4 million new shares to the public while existing shareholders will sell some 128.8 million existing shares under an offer for sale.

The final IPO price will be set after the bookbuilding process whereby institutional investors will bid for shares. Retail investors will pay the lower of RM1.28 or 95 per cent of the final institutional price.

Shin Yang made a net profit of RM101.7 million on revenue of RM673.5 million in the financial year ended June 30 2009.

AmInvestment Bank is the adviser and managing underwriter, and both AmInvestment and CIMB are the joint underwriters, joint global coordinators, joint bookrunners and joint lead managers for the IPO.