Law (left) and Wegmans managing director Keh Wee Kiet at a press conference for Wegmans’ debut on the ACE Market yesterday. Photo by Sam Fong
KUALA LUMPUR: Wegmans Holdings Bhd made a positive debut on the ACE Market of Bursa Malaysia yesterday — opening at 30.5 sen, a premium of 5.17% from the issue price of 29 sen.
The stock moved in the range of between 28.5 sen and 32 sen during the day before closing at 29.5 sen, up 0.5 sen or 1.72%, with 82.8 million shares changing hands — emerging as the third most active counter on Bursa. Its market capitalisation stood at RM147.5 million.
The home furniture manufacturer received strong interest from investors for its initial public offering of 25 million new shares, which saw its public portion 16.35 times oversubscribed.
The listing of Wegmans shares raised RM29 million for the group. Of the full amount raised, RM22 million will be used for the construction of new factories for manufacturing production and its new head office, new showroom and workers’ hostel and purchase of new machinery and equipment, RM3.5 million for working capital and the remaining RM3.5 million for listing expenses.
The proceeds will be utilised over the next two to two-and-a-half years.
“For the new factories, we are going to have the latest and more advanced machines so we can reduce our dependence on foreign workers,” said its executive director Collin Law Kok Lim at the listing ceremony yesterday.
“The success here today will energise us to take our group to the next level as it has given us great confidence to seize more opportunities ahead. Being able to obtain such an overwhelming response from our retail investors is great news for our group, which started out as a humble furniture parts maker 24 years ago,” he added.
Law said the group will focus on extending its presence in Europe and China this year. China now contributes less than 2% to its total revenue.
“We will take part in an exhibition to showcase our products in Shanghai this coming September,” he added.
The group’s top export market is Japan, followed by the US, Australia and the UK. In 2016, revenue contribution from Japan was 23%, with 18% from the US, 15% from Australia and 12% from the UK.
“A total of 98.4% of our revenue [in 2016] was derived from exports. We are not into retail business. Our customers are mainly wholesalers, retailers, and chain store traders,” said Law.
“We don’t see any direct local competitor as far as public listed companies are concerned. Other furniture players like Poh Huat [Resources Holdings Bhd] and Lii Hen [Industries Bhd] have different focuses, while for us we export our products around the globe,” he added.