This article first appeared in The Edge Financial Daily, on November 19, 2015.

PETALING JAYA: ACE Market-listed ES Ceramics Technology Bhd, which saw its net profit more than double in the last financial year ended May 31, 2015 (FY15), plans to transfer to the Main Market of Bursa Malaysia in three years.

“We should be able to transfer to the Main Market in three years if we continue to grow like this,” ES Ceramics chief executive officer Wong Fook Lin told reporters after the group’s annual general meeting yesterday.

Its FY15 net profit rose 113.36% to RM5.59 million from RM2.62 million a year earlier. In the first quarter ended Aug 31, 2015 (1QFY16), ES Ceramics’ net profit rose 31.3% to RM1.51 million from RM1.15 million in 1QFY15.

Wong said the company should be able to record “promising” FY16 financial results, given the current strong demand from rubber glove manufacturers.

“The environment is fertile for the glove industry, with low commodity prices and weak currencies favourable for glove makers,” he said.

ES Ceramics was featured in The Edge Financial Daily on Oct 28 as Insider Asia’s stock of the day, which said major expansion exercises of the rubber glove industry in Malaysia will drive demand for ceramic hand formers and that ES Ceramics is one such company that focuses on producing hand formers for the production of medical, household, surgical and industrial gloves.

Although ES Ceramics’ raw material, fine ceramic materials, are fully imported, Wong said the company’s exports are also priced in US dollars and Thai baht. This provides a natural hedging for the company.

Wong said the company will only consider declaring dividends in FY15, as it needs to keep cash in hand to invest in more automation, particularly in its casting and texturing processes, though it has yet to identify the quantum of the investment.

“We are mindful of the importance to reward our shareholders. But we have to take into consideration our free cash flow and future needs [to invest]. We will fund the automation plan internally,” he said, adding that the company’s cash stands at RM17 million currently. “We would like to increase our output, but in a controlled manner,” he added.

Currently, ES Ceramics has two manufacturing plants — one in Ipoh — and another in Hat Yai, Thailand. Both plants produce 180,000 to 200,000 formers per month.

ES Ceramics’ market share in the local glove former market is about 10% to 15%; and its export markets include Indonesia, Thailand, Sri Lanka, Vietnam, and the United States.

ES Ceramics shares closed two sen or 3.92% lower at 49 sen yesterday, with a market capitalisation of RM101.7 million. Year-to-date, the counter has gained about 158%.