KUALA LUMPUR (June 20): SFP Tech Holdings Bhd ended its debut day on the ACE Market with a closing price of 67 sen, representing a premium of 37 sen or 123% above its initial public offering (IPO) price of 30 sen.
Shares of SFP Tech opened 30 sen higher at 60 sen, and touched an intraday high of 70 sen. It was the top active counter of the day, with 329 million shares traded.
At its last close, SFP Tech has a market capitalisation of about RM536 million.
SFP Tech first commenced its operations in sheet metal fabrication back in 2012. It was later involved in the provision of computer numerical control machining and mechanical assembly services, as well as automation equipment solutions.
The group has customers in Malaysia, the US, Singapore, Vietnam, Thailand and Europe.
SFP Tech raised RM62.23 million from its IPO, which will be predominantly utilised for its capital expenditure including the construction of Manufacturing Plant 3 in Penang Science Park and purchase of machinery. It will also be utilised for the set-up of a design and development centre.
The IPO exercise entails a public issue of 207.44 million new ordinary shares with an enlarged issued share capital of 800 million, bringing SFP Tech a market capitalisation of RM240 million at the point of listing. Public Investment Bank Bhd was the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO exercise.
Speaking after the listing ceremony, managing director Keoh Beng Huat said the listing marks the beginning of a new chapter for the company.
Keoh expects Manufacturing Plant 3 to be completed in this quarter and on track to be fully operational by the fourth quarter of 2022.
Moving forward, SFP Tech plans to further expand both its engineering supporting services and automated equipment solutions into other industries, such as automotive and healthcare.
The group also intends to move into the semiconductor back-end inspection industry, through the manufacturing of vision inspection equipment platforms embedded with camera imaging and electronics systems.
On the global semiconductor chip shortages, SFP Tech head of corporate strategy and communications Ivan Yap said the issue faced by SFP Tech is under control.
In regard to the weakening of the ringgit, Yap said SFP Tech would benefit as the company is a net exporter, and that the cornerstone of its earnings is from foreign-based multinational companies.
"As for fluctuations in material prices happening on a weekly basis, of course our quotes also change accordingly. There is a pass-through mechanism to our customers," Yap said.
On the group's dividend policy, Yap said a policy has yet to be fixed except that there are plans to pay dividend if the company's profit grows.
In the first quarter ended March 31, 2022, the Penang-based company posted a revenue of RM17.9 million and a net profit of RM8.67 million.
"Our first-quarter results were an indication of our [growing] trend but bear in mind that there was an exceptional gain in the results from our acquisition of EST (Exhibit Automation Sdn Bhd)," said Yap. EST focuses on provision of automation equipment solutions and trading of spare parts.
Meanwhile, Hong Leong Investment Bank (HLIB) Research has initiated coverage of newly listed SFP Tech with a "buy" call and a target price of 63 sen per share, based on 18 times financial year 2023 price-to-earnings ratio.
The research house pointed to SFP Tech's "strong foothold" in the semiconductor, electrical and electronics and solar photovoltaic spaces.
"We project earnings to grow significantly at a three-year compound annual growth rate of 22% for FY22-24," said HLIB.
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