Cpe Technology Berhad (Malaysia)

The company was incorporated as a private company limited by shares in Malaysia on 26 April 2021.
The Company s principal activity is investment holding while our Group is an engineering supporting services provider principally involved in manufacturing of precision machined parts and components and provision of CNC machining services.
20 September 1985 when our founder, Mr. Foo, in partnership with his spouse, Ms. Leong, set up Champion PEW in Singapore in a rented property. Mr. Foo was previously involved in trading and distribution of machinery and equipment for precision machining. Through his experience and knowledge, he saw an opportunity to set up Champion PEW to provide installation of industrial machinery and equipment as well as mechanical engineering works to the general mechanical parts market. Champion PEW was converted into a sole proprietorship of Ms. Leong in 1988. Mr. Foo then focused on the day-to-day operations of Champion PEW, including marketing as well as technical issues during machining. Our Executive Director and Group Chief Executive Officer, Mr. Lee, subsequently joined Champion PEW in 1989, initially as a machine operator.
As a strategic business decision, Mr. Foo, Mr. Lee, Mr. Chan Siew Hong (an ex-employee of our Group), and Mr. Seah Ngee Chuah (an ex-employee of our Group), incorporated Champion in Malaysia on 24 November 1994 and relocated our Group's manufacturing activities to Malaysia. Champion P purchased and established our Group's first factory in Malaysia located in Ulu Tiram, Johor on a lot approximately 4,800 sq ft large. The factory was purchased from Panoramic Industrial Development Sdn. Bhd., an entity which is not a related party to our Group, our Promoters and our Directors, for approximately RM0.44 million in 1994. At that time, other services of our Group such as sales and marketing, engineering support and logistic services remained in Singapore. As at the LPD, our sales and marketing, engineering support and logistic services are carried out in both Malaysia and Singapore.
Champion PT was incorporated by third parties which are not related to our Promoters on 22 August 1995 under the name Libratech Enterprise Sdn. Bhd. to initially undertake property investment activities. Champion PT assumed its current name on 13 December 2005. Mr. Foo and Mr. Chan Siew Hong subsequently acquired the shares from the said third parties on 12 September 1995 and each of them held 50.00 shareholding in Champion PT at that point in time. Mr. Lee and Mr. Mu became shareholders of Champion PT on 11 October 2001 with the shareholding of 15.00 each in Champion PT while Mr. Foo and Mr. Chan Siew Hong held 35.00 shareholding each in Champion PT. Mr. Chan Siew Hong ceased to become a shareholder of the company on 10 September 2012, leaving Mr. Lee, Mr. Foo and Mr. Mu as the shareholders of Champion PT with the shareholding of 50.00 , 30.00 and 20.00 in Champion PT respectively. Prior to transfer of their respective ordinary shares in Champion PT to Platinum Success on 18 December 2018 to facilitate the HKEX IPO, Mr. Lee, Mr. Foo and Mr. Mu holds 50.00 , 30.00 and 20.00 shareholding in Champion PT respectively. Through Champion PT, our Group acquired our second and third factories in Ulu Tiram, Johor from Crescendo Development Sdn. Bhd., an entity which is not a related party to our Group, our Promoters and our Directors for RM0.65 million each in 1995 with a combined land area of approximately 18,000 sq ft to support our Group's manufacturing activities.
Champion PE was then incorporated on 30 January 1996 by Mr. Foo and his spouse, Ms. Leong in Singapore in order to take over the business and operations of Champion PEW. Upon incorporation of Champion PE, Mr. Foo and Ms. Leong were each allotted 1 ordinary share of SGD1.00 respectively, with their aggregate shareholdings representing the entire issued share capital of Champion PE. Upon completion of the transfers of Ms. Leong's shares to Mr. Foo, Mr. Chan Siew Hong, Mr. Seah Ngee Chuah, Mr. Lee and Mr. Mu on 16 April 1996, Ms. Leong ceased to be a shareholder of Champion PE while Mr. Foo held 35.00 shareholding in Champion PE, and Mr. Chan Siew Hong, Mr. Seah Ngee Chuah, Mr. Lee, and Mr. Mu became shareholders of Champion PE with the shareholding of 35.00 , 10.00 , 10.00 and 10.00 in Champion PE respectively. Mr. Seah Ngee Chuah exited as a shareholder of Champion PE on 4 September 1999, leaving Mr. Foo, Mr. Chan Siew Hong, Mr. Lee and Mr. Mu as the shareholders of Champion PE, holding 35.00 , 35.00 , 15.00 and 15.00 shareholding in Champion PE respectively. Mr. Chan Siew Hong exited as a shareholder of Champion PE on 13 July 2012, leaving Mr. Lee, Mr. Foo, and Mr. Mu as the shareholders of Champion PE, holding 50.00 , 30.00 and 20.00 shareholding in Champion PE respectively until they transferred their respective shareholding in Champion PE to Platinum Success on 5 November 2018 to facilitate the HKEX IPO. Champion PE was involved in the installation of machinery and equipment, mechanical engineering works, and manufacturing of precision-machined parts and components. As at the LPD, the majority of manufacturing activities are carried out in our facilities in Malaysia while Champion PE carries out minor amendments to the precisionmachined parts and components. Champion PEW was terminated as a sole proprietorship of Ms. Leong on 30 April 1996.
In 2000, Champion PT began to undertake manufacturing activities, beginning with the manufacture of precision-machined parts and components for the engineering and mechanical industries. As a result, Champion P gradually decreased its manufacturing activities and became dormant beginning of 2001 and was subsequently dissolved following the lodgement of return by liquidator relating to final meeting dated 6 October 2018. Additionally, in 2000, our Group moved our manufacturing operations from our first factory into the second and third factories and the first factory was subsequently disposed in the same year to Concordmold Technology Sdn. Bhd., an entity which is not a related party to our Group, our Promoters and our Directors, for a disposal consideration of RM0.50 million. In the same year, our Group's QMS attained ISO 9001:2000 certification from Certification International (UK) Limited under the scope of “precision machining engineering services”. This represented our first commitment towards ensuring the quality of our service offerings were aligned to international standards. Further information on our QA can be found in Section 6.13 of this Prospectus.
The company then acquired Plant 1 from Crescendo Development Sdn. Bhd. for RM3.85 million with a gross floor area of approximately 31,815 sq ft in 2005 and the company subsequently shifted our manufacturing activities from our second and third factories to Plant 1 where we began to manufacture precision-machined parts and components for the automotive industry. As a strategic business decision, our Group's ventured into the automotive industry as we had dentified the industry as an industry that was performing well and would continue to be promising in the future and at that time and up to and including the LPD, we have the necessary capabilities to manufacture the precision-machined parts and components for our customers in the automotive industry based on the strength of our engineering team. Based on the designs given by our automotive customers, our engineering team is able to design the relevant precision-machining processes and based on the processes designed by our engineering team, our production workers are able to produce the relevant precision-machined parts and components that meet the specifications and requirements of our automotive customers.
Our second and third factories were sold to Gah Hong Precision Sdn. Bhd., an entity which is not a related party to our Group, our Promoters and our Directors, for disposal consideration of RM0.75 million each in 2006. Over the years, we continued to gradually expand and began to increase our manufacturing activities for the life science and medical devices industry in 2007.
In 2008, the company successfully penetrated the sport equipment industry with our first purchase order which amounted to approximately RM0.19 million from Sport Equipment Customer 1 for precision-machined parts and components used for hydraulic brake systems. The company have continued to work with Sport Equipment Customer 1 over the years and have been recognised for our product development and innovation. We received various awards from Sport Equipment Customer 1 over the years such as the “Innovation Award” in 2011, the “Special Achievement Award” in 2014, and the “Best Performance Award” for the Reel Division of Sport Equipment Customer 1 in 2017, 2018, 2019 and 2020.
On 25 September 2012, Champion C was incorporated by Mr. Foo and Mr. Lee and each of them hold 50.00 shareholding in Champion C upon incorporation. Champion C began manufacturing of precision-machined parts and components for the sport equipment industry as the sub-contractor of Champion PT. Since then, Champion C has become Champion PT's sub-contractor and has expanded into manufacturing of precision-machined parts and components for Champion PT for a range of industries. Mr. Mu became a shareholder of the company on 14 July 2016, resulting in Mr. Lee, Mr. Foo and Mr. Mu as the shareholders of Champion C holding 50.00 , 30.00 and 20.00 shareholding in Champion C respectively until they transferred their respective shareholding in Champion C to Platinum Success on 6 December 2018 to facilitate the HKEX IPO. Champion Oil was also incorporated on 25 September 2012 to manufacture precision-machined parts and components for use in the oil and gas industry as the sub-contractor of Champion PT, in particular for O G Customer 1. Our Group did not secure projects from O G Customer 1, instead, our Group would receive purchase orders from O G Customer 1 on an ad hoc basis. Champion Oil was eventually declared dormant in November 2019 following our Group's decision to focus on other industries such as semiconductor, life science and medical devices and sport equipment.
In light of increased demand for our Group's services, the company rented Plant 4 and a factory located at No. 7, Jalan Indah Gemilang 5, Taman Perindustrian Gemilang, 81800, Ulu Tiram, Johor in 2013. In the same year, we commenced operations in Plant 4 and the said factory. The company subsequently ceased leasing the said factory in 2019 after Champion Oil ceased operations on 31 October 2019. On the other hand, the company completed the purchase of Plant 4 in 2021 from Spring Maple Sdn. Bhd, an entity which is not a related party to our Group, our Promoters and our Directors, for a purchase consideration of RM6.50 million.
In 2014, our ISO 9001 certification for our QMS was updated and the company were re-certified with ISO 9001:2008 under the scope of “precision machining for electro-mechanical parts by the Vehicle Certification Agency. Our Group also attained additional certification in relation to our QMS in 2014; namely the ISO/TS 16949:2009 certification from the Vehicle Certification Agency under the scope of “precision machining for electromechanical parts. ISO/TS 16949:2009 differs from ISO 9001:2008 as it has particular requirements for the automotive industry and this represented our continuous commitment towards ensuring the quality of our service offerings in automotive industry that were aligned to international standards.
Manufacturing activities for the semiconductor industry in 2016 where we manufactured precision-machined parts and components used for front-end semiconductor manufacturing, whereby the blank wafer is fabricated to a completed wafer. As a strategic business decision, our Group increases our manufacturing activities for the semiconductor industry as we had observed that the industry was performing well and would continue to be promising in the future and at that time up to and including the LPD, the company have the necessary capabilities to manufacture the precision-machined parts and components for our customers in the semiconductor industry based on the strength of our engineering team. Based on the designs given by our semiconductor customers, our engineering team is able to design the relevant precisionmachining processes and based on the processes designed by our engineering team, our production workers are able to produce the relevant precision-machined parts and components that meet the specifications and requirements of our semiconductor customers. The company have recorded a revenue of approximately RM3.15 million from our semiconductor customers in the FYE 30 June 2016.
In 2017, the company acquired Plant 3 from Sumber Terang Sdn. Bhd., an entity which is not a related party to our Group, our Promoters and our Directors, for RM6.75 million and subsequently began operations there to accommodate our growing business in the semiconductor industry. During the same year, the company also acquired Plant 2 from Sumber Terang Sdn. Bhd. for RM6.75 million. However, the facility was previously rented out to a tenant and we only began operating in Plant 2 in 2019.
Our Group had, on 19 November 2018, submitted an application to the HKEX seeking for listing on the Main Board of the HKEX by way of share offer. Our Group had met the prevailing profit requirements for the Main Board of the HKEX then at the point of submission for the HKEX IPO.
However, after submission on 19 November 2018 and whilst still in the FYE 30 June 2019 (before the FYE 30 June 2019 ended), our Group realised that the financial performance of our Group would likely drop as compared with that of the FYE 30 June 2018. Had FYE 30 June 2019 figures were to be used for the third financial year of the profit track record of our Group for the HKEX IPO, our Group realised that the company may not be able to achieve the pre-requisite minimum profit requirement for the third financial year for the Main Board of the HKEX.
Taking into consideration the foregoing and the Anti-Extradition Law Amendment Bill Movement (also known as the 2019 Hong Kong protests, which were a series of demonstrations since 15 March 2019), and coupled with the expiry of the mandate with our principal adviser for the HKEX IPO on 31 March 2019, our Group had decided against continuing with the listing exercise on HKEX (by possibly extending the mandate).
In 2019, as a strategic business decision, our Group began to shift our focus to the semiconductor industry and to slow down our involvement in the automotive industry. This was mainly due to the growing trend in electric vehicles which would lead to a lower demand for engine parts and components manufactured by our Group. Since then, we have continued to grow our business in the semiconductor industry and gained new customers.
In 2022, in anticipation of the growth of our business and pending the completion of construction of the New Plants, Champion PT has entered into a tenancy agreement dated 26 December 2022 to rent Plant 5. The duration of the tenancy is 2 years commencing from 1 January 2023 and ending on 31 December 2024 with an option to renew for a further term of 1 year subject to maximum 10.00 increment of the rental and other terms and conditions to be agreed upon.
Champion PT had obtained all of the relevant licences and approvals for the operations of Plant 5. As at the LPD, Plant 5 is in the midst of undergoing renovation which is targeted to be completed by the month of December 2023.
The company expect to commence operations in Plant 5 immediately and as practically possible upon completion of the renovation of Plant 5 and relocation of the 52 auto-lathe machines from Plant 2 and Plant 3 to Plant 5. Barring any unforeseen circumstances, the company expect to complete the renovation and the relocation of the 52 auto-lathe machines from Plant 2 and Plant 3 to Plant 5 by the end of December 2023 and thereafter the commencement of operations in the month of January 2024.