KUALA LUMPUR: Industrial adhesives manufacturer, Techbond Group Bhd, which made an impressive debut on the Main Market of Bursa Malaysia yesterday with a 20 sen, or 30.3%, jump in share price at the close of trading, says it will now carry on with its plans to strengthen its capabilities and expand its export markets.
The counter opened at 80.5 sen, a 14.5-sen premium to its initial offer price (IPO) price of 66 sen, jumped to as high as 88.5 sen before ending at 86 sen, giving it a market capitalisation of RM197.8 million.
It saw 78.81 million shares traded.
“The response from the market signals the public’s confidence in the group and we are humbled by it. We will now continue with our plans to expand our capacity, both locally and abroad, and to grow our export markets,” said Techbond managing director Lee Seng Thye told reporters yesterday.
Lee said the group will be setting up its new facility in the Vietnam-Singapore Industrial Park 2 in Binh Duong Province, Vietnam, which is expected to be completed in 2020.
The facility will boost its manufacturing capabilities in Vietnam, which now solely rely on its existing facility in Ho Chi Minh City that has been in operations since the early 2000s.
“We decided to set up our facility in Vietnam at the time because the business there was booming. There were also incentives that made it attractive to set up shop there, such as a two-year tax-free period and a 50% deduction in corporate tax for the first few years,” he said.
“It was also easier to get workers in Vietnam,” he added.
Lee said the group is likely to see double-digit growth in sales for its financial year ending June 30, 2019 (FY19), but added that the growth in FY20 will be better, as soon as its new facility commences operations.
About 80% of its annual revenue is sourced from overseas. It exports to Indonesia, China, Thailand, Cambodia, Brunei, Liberia, Singapore, Sri Lanka, Maldives, Hong Kong and Uganda.
Some of its major clients include established furniture makers and companies in the food labelling industry.
Techbond’s IPO raised proceeds of approximately RM39.67 million, of which 75% will be used for the new facility in Vietnam and the balance to buy machineries and equipment for its facility in Shah Alam, Selangor.