i-Stone active, jumps 72% on ACE Market debut

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KUALA LUMPUR (July 17): Shares in Johor-based automation solutions provider i-Stone Group Bhd jumped as much as 71.9% to 27.5 sen upon its ACE Market debut this morning.

The stock had opened at 25 sen — nine sen or 56.3% higher than its initial public offering (IPO) price of 16 sen.

At 10.24am, i-Stone was trading at 24 sen and saw a turnover of 382.71 million shares, topping Bursa Malaysia's most active list.

i-Stone is principally involved in the design, manufacturing and modification of specialised automation machines, maintenance and technical support services, and provision of data management systems.

The group, which supplies most of Dyson Ltd's test and inspection customised machines, is expected to continue to ride on Dyson's capacity expansion following a string of successful Dyson new product launches, having established a good relationship with the British technology company.

The Dyson group of companies contributed approximately 65.5% to the group's overall revenue in its financial year 2018 (FY18).

"Malaysia continues to be the preferred hub for Dyson for its home-appliance products production due to its well-developed electronic manufacturing services supply chain and a pervasive respect for intellectual property rights, serving as the group's key driver for earnings growth," said Inter-Pacific Research Sdn Bhd.

"We are ascribing a valuation of 15.5x price-earnings ratio (PER) pegged to its FY20 earnings per share of 1.2 sen, giving it a fair value of 18.5 sen, translating into a potential return of 19.6% inclusive of dividends. Our PER valuation of 15.5x is within the valuation range of automation equipment peers of 8.9x -19.7x," its analyst David Lai said in a note July 8.

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