KUALA LUMPUR (Jan 8): Telecommunication support service provider Binasat Communications Bhd - the first company to debut on Bursa Malaysia this year - opened at a 30.4% premium over its initial public offering (IPO) price on the ACE Market today.

The offering drew significant interest with an oversubscription rate of 34.23 times, with a total of 10,465 applications for 458.02 million shares received from the Malaysian public for the 13 million shares made available.

At an issue price of 46 sen, Binasat is seeking to raise RM39.55 million through the IPO to finance its expansion, which includes setting up a teleport in the Klang Valley and penetrating markets in Laos, Myanmar, and Vietnam.

The group said today it is confident of achieving revenue growth for all three sectors of satellite, mobile and fibre optics moving forward, in line with government initiatives and the growing capital expenditure by most telcos in the country.

"The telecommunication industry has always been evolving and expanding year-on-year, we do not foresee their investment would reduce, as they will have to cater for network expansion and coverage," Binasat's chief financial officer Steven Ng told reporters after the group's listing here today.

The Malaysian Communications and Multimedia Commission is also expected to introduce projects for the sustenance of network coverage in remote areas, Ng added.

Out of the proceeds raised from the IPO, RM14.36 million will be used to finance the teleport, RM10.5 million of which has been allocated for its construction and the purchase of three acres (1.21ha) to four acres of land.

The enhancement of its operations and maintenance services will amount to RM4.9 million.

Another RM4.8 million of the IPO proceeds will be used to enhance its fibre optic network installation and commissioning service capability, involving setting up warehouses in Johor.

Meanwhile, RM10.79 million will be used for working capital over a two-year period while RM1.5 million has been allocated for its expansion into Laos, Myanmar and Vietnam.

The group is currently in preliminary talks with a local supporting service provider, equipment suppliers, and telcos and is looking to set up a representative office in Vietnam and Myanmar by the third quarter of this year, and in Laos by the second quarter of 2019.

For its first financial quarter ended Sept 30, 2017 (1QFY18), the group posted a net profit of of RM1.53 million on the back of RM10.16 million revenue.