This article first appeared in The Edge Financial Daily, on March 9, 2016.

KUALA LUMPUR: Chin Hin Group Bhd, which expects double-digit profit growth in 2016, saw its share price shoot up as much as 28% over its initial public offering (IPO) price of 65 sen during its maiden trading day, making it among the top 10 gainers on Bursa Malaysia yesterday.

The building material supplier’s share price opened at 81 sen and climbed to an intraday high of 83.5 sen. The stock finished at 82 sen with a trading volume of 122.5 million shares — the second most traded counter on the stock exchange.

Chin Hin’s IPO entailed a public issue of 63.2 million new shares and an offer for sale of 65 million existing shares at 65 sen each to raise RM41.08 million.

Speaking to reporters after Chin Hin’s listing ceremony yesterday, the group’s managing director Chiau Haw Choon said the management is expecting double-digit net profit growth in the financial year ending Dec 31, 2016 (FY16).

He said Chin Hin would see “significant” growth in FY16, driven mainly by its manufacturing division. “Our G-cast concrete and AAC (autoclaved aerated concrete) are applicable to infrastructure building, so we expect that sales of these products would grow significantly this year (FY16),” he said.

Chiau added that despite the softer property market, Chin Hin’s growth will be supported by firm demand in the infrastructure segment.

Asked if the group is facing a rising cost burden due to the weakening ringgit, he explained that Chin Hin sources most of its raw materials locally, thus the impact is expected to be minimal.

“In fact, even when it comes to labour cost, we also expect very minimal impact from the increased levy. This is because we have been using advanced machinery in our production line, so most parts of the manufacturing line are automated,” he said.

Meanwhile, Chiau revealed that the group is ramping up its export sales, and having a target of RM40 million turnover, to overseas in FY16, from about RM20 million for FY15.

For FY15, Chin Hin posted a slight gain of 0.12% in net profit to RM30.22 million, from RM30.19 million previously, though revenue slipped 1.66% to RM1.2 billion from RM1.22 billion in FY14.

Chin Hin attributed the drop in revenue to lower turnover from its distribution segment, as a result of softening housing construction activities in 2015, though this was offset by its manufacturing segment, which enjoyed a higher margin.