KUALA LUMPUR (Jan 16): Newly ACE-Market listed Wellspire Holdings Bhd ended its maiden trading day at 43 sen on Monday (Jan 16), up 20 sen or 86.96% versus its initial public offering (IPO) price of 23 sen.

It saw strong buying momentum, opening at 33 sen before surging to a high of 59 sen — a 157% premium than its issue price. The stock was traded between a low of 32.5 sen and a high of 59 sen on Monday.  

At the closing price of 43 sen, the Thailand-based snack food distributor had a market capitalisation of RM306.21 million.  

Its trading volume swelled more than 18 times to 231.74 million against 12.58 million within the first hour of trading — making it the second-most active stock on the local bourse after Sapura Energy Bhd (454.71 million).  

Based on the IPO price of 23 sen per share, Wellspire is priced at a trailing price-to earnings ratio of 14.7 times of its earnings per share for the financial year ended Dec 31, 2021 (FY2021), according to TA Securities Research’s note dated Jan 3. The research house derived a fair value of 27 sen for the stock.  

Wellspire is an investment holding company which is principally involved in the distribution of consumer packaged foods. The group’s main product is sunflower seeds, where Wellspire has been the exclusive distributor of ChaCha brand sunflower seeds and nuts for the Thailand market since January 2013.  

It also distributes other snack foods such as other seeds and nuts, and baked and confectionery products comprising third-party brands (Cundo) as well as own brands (Pee Ree, Miyu, King Kong). 

The group’s shares offered to the public under its IPO exercise were oversubscribed by 11.24 times. It offered 124.6 million shares for its listing exercise to raise RM28.7 million fresh capital, of which RM16 million will be utilised for the acquisition or construction of a warehouse and operational facilities in Thailand, RM5.96 million for working capital and another RM6.7 million will be allocated to defray listing expenses. 

Wellspire chief executive officer and executive director Mo Guopiao said the company’s journey over the year has been underpinned by its execution and strong management, which effectively earned the trust of its key customers, including CP All, Big C, Ek-Chai and Siam Makro.  

“Notwithstanding all of our group’s revenue is derived from Thailand, we have chosen to list Wellspire in Malaysia and the overwhelming demand for our IPO clearly validates our decision. The successful listing of Wellspire on the ACE Market of Bursa Securities indeed marks the beginning of a brand new and exciting chapter for us, as we continue to build on the solid foundation and future growth trajectory of our group,” he said in a statement.

On its financial performance, Wellspire posted a net profit of RM962,000 on a revenue of RM30.28 million for the third quarter ended Sept 30, 2022 (3QFY2022). Its cash and bank balances stood at RM13.13 million, while its total borrowings were at RM4.52 million as at Sept 30.  

TA Securities Holdings Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for this IPO exercise.