Company Background

The Company was incorporated in Malaysia under the Act on 18 July 2022 as a private company limited by shares under the name Northeast Group Sdn Bhd. On 5 January 2024, the company completed the Acquisitions which resulted in NE Components, NE Integrated, NE Solutions, NE Technologies and Northeast Precision becoming its wholly-owned subsidiaries. Subsequently, on 10 January 2024, the Company was converted to a public limited company to facilitate its Listing and assumed its current name.

The company is an investment holding company. Through its subsidiaries, they are principally involved in the manufacturing of precision engineering components used in the photonics, E&E, semiconductor, telecommunication and optoelectronics industries. The company Group history can be traced back to 2004 with the incorporation of Northeast Precision.

As at the LPD, the Group structure is as follows:

Use of proceeds

1. Construction of the New Factory - 47.34% (within 36 months)

2. Repayment of bank borrowings - 23.67% (within 12 months)

3. Purchase of new CNC machines - 14.65% (within 36 months)

4. Working capital - 6.53% (within 12 months)

5. Estimated listing expenses - 7.81% (Within 1 month)

Construction of the New Factory - 47.34% (within 36 months)

As at the LPD, the company business activities are carried out at 3 factories located in Juru and Bukit Minyak, Pulau Pinang, further details are as follows:

The company intends to construct the New Factory and they plan to move:

(i) NE Components’ business operations from Factory 2 to the New Factory; and

(ii) NE Technologies’ business operations from Factory 1 to the New Factory

The breakdown of the construction cost of the New Factory is estimated to be as follows:

Repayment of bank borrowings - 23.67% (within 12 months)

The company intends to use RM20.00 million or approximately 23.67% of the gross proceeds raised from the Public Issue to partially repay its outstanding bank borrowings as follows:

Purchase of new CNC machines - 14.65% (within 36 months)

The company intends to use approximately RM12.38 million or approximately 14.65% of the gross proceeds raised from the Public Issue to purchase new CNC machines. The company plans to upgrade and increase the number of CNC machines to allow them to meet the demand from its existing and new customers in terms of order size, complexity as well as to reduce delivery lead time.

Details on the CNC machines to be purchased are as follows:

Working capital - 6.53% (within 12 months)

The company intends to use approximately RM5.52 million or 6.53% of the gross proceeds raised from the Public Issue for the purchase of our main raw materials, such as aluminium, copper and stainless steel. Such amount was arrived at after considering the additional raw materials required to support its future plans and business strategies.

Business Model

The company Group’s business model and activities are summarised as follows:

The company plays a pivotal role in the manufacturing industry value chain as precision engineering components manufactured by us are further processed and/or used for assembly for its customers’ end-products, as shown below:

Click here to continue the IPO - Northeast Group Berhad (Part 2)​​​

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