Asia Pioneer plans June IPO to fund expansion

Asia Pioneer Entertainment Holdings, a Macau gaming equipment supplier, is seeking to raise funds through an initial public offering on the Hong Kong Stock Exchange in June to finance future expansion.

The company, which is the fifth largest electronic gaming equipment supplier and the largest electronic table games supplier in Macau as of 2015, was founded by local entrepreneurs Herman Ng and Allen Huie.

The company said the listing will help it to strengthen its position as an electronic

gaming equipment technical solution provider. The proceeds will enable it to pursue its business objectives, such as securing more trial products from suppliers, as it does not have sufficient fixed assets to obtain bank financing for any meaningful expansion on commercially viable terms.

It also plans to purchase 20 pieces of electronic gaming equipment for lease to operators in Macau and to buy 50 machines from Macau operators for refurbishment. It aims to hire more sales and marketing staff and to move offices.

The company was established in 2005 and was one of the first approved gaming machine agents in Macau to provide a full range of customized technical solutions for the market.

It is now eyeing expansion in Southeast Asia, as new resorts open up around the region.

“We endeavour to expand our customer base and broaden our revenue stream by refurbishing and reselling used Electronic Gaming Equipment in Macau for use in South East Asia,” it said.

According to the prospectus, the top seven participants in Macau’s gaming market accounted for 90.5 percent of revenue for electronic gaming equipment in 2015. There were a total of 16 manufacturers selling ETGs, with the top three accounting for 85 percent of revenue.

The stock will be listed on Hong Kong’s GEM market, which is designed for smaller, developing companies, with a higher investment risk. The public offer is scheduled to begin on June 6th.

Asia Pioneer reported total revenue of $52.5 million in 2016, up from $48.1 million the prior year. Gross profit was $23.2 million, up from $19.5 million.