KUALA LUMPUR: Packaging solutions provider L&P Global Bhd made an impressive debut on the ACE Market of Bursa Malaysia on Tuesday (Jan 3), opening at 42 sen over its initial public offering (IPO) price of 30 sen a share before closing even stronger.
Over the day its share price climbed to 53 sen and finished at 54.5 sen for an 82% premium over its offer price, and boosting its market capitalisation to RM305.2 million.
Trading volume opened at 19.98 million, and by the day's end had reached 255.37 million shares, making L&P Global the third most actively traded company on the bourse on Tuesday.
L&P Global has a dividend policy to pay out between 20% and 50% of its annual audited net profit.
Executive director cum chief executive office Ooi Lay Pheng said the listing status and funds raised will enable the group to expedite its expansion plans.
“At our utilisation rate for the seven-month period ended July 31, 2022 of approximately 90%, we need to ready ourselves with additional capacity to take on new businesses,” she told the media at the listing event on Tuesday.
“Furthermore, against the backdrop of the ongoing US-China trade tensions, MNCs (multinational corporations) are relocating and setting up new manufacturing facilities in the Southeast Asian region.”
She is confident that the group will maintain its performance despite a possible recession.
“Though we are seeing a slowdown, we have a high influx of foreign direct investments that come into Penang and Malaysia as well. So with that, [while] there is a slowdown, there are also business opportunities for us to tap into,” she said, noting that packaging solutions providers are integral to many industries.
L&P Global is the first listing on the ACE Market this year. The stock exchange reported 25 ACE Market listings in 2022 compared to 11 in 2021.
The group raised RM33.9 million from the IPO exercise, with RM13 million representing 38.4% deployed as working capital. In addition, RM10 million or 29.5% will be allocated for capital expenditure to set up a new factory in Johor, while RM2 million (14.8%) is reserved for repayment of bank borrowings, and RM3.9 million (11.5%) will be utilised to defray listing expenses.
Alliance Islamic Bank Bhd was the principal adviser, sponsor, and sole underwriter for the IPO exercise.
Alliance Islamic Bank and Affin Hwang Investment Bank Bhd were the joint placement agents.
Source : The Edge Markets