Sik Cheong makes ACE Market debut with 85% premium
Published on: Tuesday, August 13, 2024
By: Bernama
Out of RM17.8 million raised from the IPO, Sik Cheong Bhd has allocated RM7.2 million to expand the packaging facility by rebuilding a factory and purchasing new equipment. (Facebook pic)
PETALING JAYA: Refined, bleached and deodorised (RBD) palm olein product supplier Sik Cheong Bhd made its debut on the ACE Market of Bursa Malaysia at 50 sen, representing an 85.2% premium over its initial public offering (IPO) price of 27 sen.
At 9am, the counter saw 8.2 million shares changing hands.
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As at 2pm, the company’s share price was up by 10.5 sen or 38.89% at 37.5 sen, giving it a market capitalisation of RM100 million.
Managing director Wong Hing Ngiap said the company has raised a total of RM17.8 million from the IPO.
Of this amount, a sum of RM7.2 million or 40.3% is earmarked for the expansion of the packaging facility, including rebuilding a factory and purchasing new machinery and equipment, he said.
Additionally, RM0.9 million (5%) is directed to the purchase of new delivery trucks.
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The group also allocated RM6 million (33.4%) for working capital, with the remaining RM3.8 million (21.3%) to cover listing expenses.
With the fresh capital raised, we are now poised to embark on our next phase of expansion, he said at a press conference following the company’s listing ceremony.
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When asked if the recent ringgit hike has impacted the company’s ability to mitigate raw material costs, Wong said it has not affected its operating cost, likely because the increase is still recent.
Meanwhile, regarding the expected easing of crude palm oil (CPO) prices in the third quarter and how high operating costs might impact the group’s bottom line and profit margins going forward, he said the key strategy is managing the turnover rate.
“We maintain a very short turnover rate. Costs are quickly offset by sales to customers, which helps us manage the volatility in CPO prices.
Additionally, if costs increase, we can pass these increases on to customers by frequently revising our selling prices, he said.
He added that the company’s current stock turnover rate is five to seven days.
Sik Cheong is primarily known for offering cooking oil brands such as Sawit Emas, Vitamas, and lamp oil under the Pingat Emas brand among other products.
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