Hock Soon Capital Berhad IPO's Analysis

Hock Soon Capital Berhad

Hock Soon Capital Berhad, through its subsidiaries, is principally involved in the poultry farming industry, focusing on rearing layer chickens for the production and sale of table eggs. The Group operates a vertically integrated business model which includes in-house feed mill operations to produce its own poultry feed, ensuring quality control and cost efficiency. Its product range is categorized into ordinary eggs and premium eggs, with the latter being enriched with nutrients like Vitamin E, Omega DHA, and selenium. The eggs are sold both unbranded and under the Group's house-brand 'QPlus', and are also packaged under customers' brands upon request. The Group's operations are based in Bidor, Perak, at its Bidor Integrated Farm. The company serves a multi-channel distribution network that includes wholesalers, retailers (such as supermarkets and grocery stores), and food manufacturers primarily within Malaysia. Additionally, the Group exports a portion of its premium eggs to an overseas customer in Hong Kong.

IPO Details
Market: MAIN
Principal Adviser: M & A Securities Sdn Bhd
Issuing House: Malaysian Issuing House (MIH)
Shariah Status: SC (Yes)
Listing Price: 0.6
PE Ratio: 7.1
    PE (FYE): 7.1
    PE (FPE Annualised): -
    PE (Hybrid): -
MITI allocation?: Yes
Closing Date: 30-Jan-2026
Balloting Date: 05-Feb-2026
Listing Date: 13-Feb-2026
Average Analysts FV :
iSaham IPO Score :
Market Cap: 300.00 M
Number of Shares: 500.00 M
IPO Allocations No. of Shares %
Malaysian Public 25.00 M 5.0%
Bumiputera shareholders approved by MITI 62.50 M 12.5%
Eligible Directors and employees 12.5 M 2.5%
Private placement to selected investors and others 50.0 M 10.0%
Total Allocations 150.00 M 30.0%

Offer for Sales of 50.00 M existing shares representing 10.0% enlarged shares.

Public Issue of 100.00 M new shares representing 20.0% enlarged shares.

Median Sectors PE:
Median Peers PE:
Utilisation of Proceeds
Purpose Amount (RM'000) %
Expansion Establishment of new poultry farm at the Teluk Intan Lands 53,450 89.1
Listing expenses Estimated listing expenses 6,550 10.9
Total 60,000 100
Utilisation of Proceeds
Business Segments
Geographical Segments
Major Customers
Revenue by Financial Year Ended
Profit After Tax (PAT) by Financial Year Ended
SWOT Analysis
Strengths
  • Integrated Operations: The company operates a fully integrated layer farming model, from manufacturing its own poultry feed to egg production and processing, which allows for better cost control and quality assurance.
  • Established Market Presence: With over 20 years of operating history, Hock Soon has established a strong network of wholesale and retail customers, including major supermarket chains across Malaysia.
  • Modern Farming Facilities: The company utilizes modern, closed-house poultry farming systems with climate control and automated feeding, leading to higher productivity and lower mortality rates compared to conventional farms.
Weaknesses
  • Customer Concentration: A significant portion of revenue, approximately 55%, is derived from its top five major customers, posing a risk if any of these key relationships are lost.
  • Geographic Concentration: All of the company's farms are located within a single state, making operations vulnerable to localized disruptions such as disease outbreaks, natural disasters, or regional regulatory changes.
  • High Capital Intensity: The business requires substantial ongoing capital expenditure for the maintenance and upgrading of farm facilities and equipment to maintain efficiency and biosecurity standards.
Opportunities
  • Export Market Expansion: IPO proceeds are allocated to upgrade facilities to meet standards for export to neighboring countries like Singapore, which has a high demand for fresh eggs and offers higher margins.
  • Downstream Diversification: Potential to expand into higher-value downstream products such as pasteurized liquid eggs, egg powder, and other processed egg components for the food and beverage industry.
  • Rising Egg Consumption: Malaysia's per capita egg consumption continues to trend upwards, driven by population growth and the affordability of eggs as a primary source of protein.
Threats
  • Feed Price Volatility: The primary cost component is poultry feed, mainly corn and soybean meal, whose prices are subject to global commodity market fluctuations and foreign exchange volatility, directly impacting profit margins.
  • Disease Outbreaks: The poultry industry is highly susceptible to disease outbreaks, such as Avian Influenza (bird flu), which could lead to mass culling, production halts, and significant financial losses.
  • Intense Competition: The layer farming industry in Malaysia is highly competitive, with major established players like QL Resources and Leong Hup International, which may exert pricing pressure.
Key Highlights

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Conclusion

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