From the annual report
2017 of Bonia Corporation Berhad, we found that this company is using equity
financing which is issuing common share to raise fund. (Appendix A) The
ordinary shareholders of Bonia Corporation Berhad are entitled to participate
in earnings (dividends) as and when declared by the company. Besides, they are also
entitled to one vote per ordinary share at the general meeting of the company. 806,287,000
of ordinary shares had been issued by the company and the shares are fully paid
by ordinary shareholders which is RM 201,572,000 in year 2017. (Stated in notes
18 of financial statement, Appendix B)

The purpose of Bonia
Corporation Berhad to issuing common share to public is to help the company for
funding expansion. Based on the Statement of Profit or Loss of the company, the
profit for the financial year 2016 and 2017 is about RM 29,308,000 and RM
39,398,000 (Appendix C), which means that the business is growing and already
established itself in public market. Therefore, it attracted more investors who
see the potential for future growth of the company to come and buy the shares.

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Furthermore, the purpose of initial public offering
(IPO) of Bonia Corporation Berhad is enables the company to raise funds in
order to increase its asset base. It gives the company a competitive advantage
against other similarly sized companies in Bursa Malaysia or industrial sector
such as Padini Holdings Berhad. Issuing IPO helps the company to generate the
capital needed to expand in future and assist it to grow further. The capital
can be used to capital expenditure or even used to pay off existing debt.
Compare debt to fund growth, the cost of issuing share is much lower. Besides,
issuing IPO leads to an increase public awareness of the company. The company
becomes a visible entity on a local, national or international level. Their
products become better known and give the company prestige to increase sales
and earnings.

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