KUALA LUMPUR (April 6): Shares in nameplates and plastic injection moulded parts manufacturer Volcano Bhd jumped as much as 101% during early trade to hit an intraday high of 70.5 sen, marking a strong debut on Bursa Malaysia’s ACE Market.
The stock, which jumped right to 70 sen after the opening bell – double that of its Initial Public Offering (IPO) price of 35 sen – subsequently pared some gains to close the day at 48.5 sen, still 13.5 sen or 38.57% above its issue price.
In a statement earlier, Volcano highlighted that its IPO was oversubscribed by 176.6 times.
It intends to raise RM8.75 million, of which RM5.55 million will be used for the purchase of machinery and equipment, while RM3.2 million will be used for listing expenses.
The IPO comprised 1.46 billion new shares, with 8.25 million shares made available to the Malaysian public, and 8.25 million shares for eligible directors, employees and business associates.
Meanwhile, a total of 594.43 million shares were set aside for bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
At a virtual listing ceremony this morning, commenting on the group’s outlook, Volcano executive director and chief financial officer (CFO) Khoo Boo Wui said the group had earmarked RM5 million for its capital expenditure (capex) plan in the next three years, and it saw a great opportunity to expand its businesses in Thailand.
“Thailand is the manufacturing hub of Southeast Asia and they have a lot of multinational companies set up there, so we see an opportunity to get more customers in the future,” he said.
The group previously said that its principal markets are Singapore and Thailand, and its foreign markets accounted for more than 95% of its overall revenue for the financial year ended Dec 31, 2020 (FY20).
It also mentioned earlier that Volcano intends to expand its factory in Rayong, Thailand as the group plans to expand its presence in the electrical and electronics (E&E) and automotive industries in the country.
Meanwhile, on the group’s dividend policy, Khoo said Volcano had set out a dividend policy of at least 30% of its net profit, subject to the business performance and recommendation of its board members.
According to the group, multinational companies (MNCs) comprise 90% of its sales, including some leading brand names such as Bernina, Hewlett Packard, Fisher & Paykel Thailand, Donaldson Thailand, Sharp Indonesia and Panasonic Thailand.
TA Securities Holdings Bhd is Volcano’s principal adviser, sole placement agent, sole underwriter and sponsor in relation to the IPO.