2019: Bumper listing year

PETALING JAYA: While 2019 has not seen Bursa Malaysia record its best performance due to various factors such as the US-China trade war, a drop in exports and a net outflow of foreign institutional investors, this has not been a deterrent for those seeking to float their company’s shares on the market.

There were 30 listings done this year, the highest number since 2006. Of these, four were on the Main Market versus two in 2018, 11 on the ACE Market (2018: 9) and 15 were on the LEAP Market (2018: 11).

Best performer: Uni Walls APS Holdings Bhd

Year to date, the best performer of the stocks listed this year is building façade services provider Uni Walls, with a year-to-date share price increase of 445.5%. The company listed on the LEAP Market on Jan 15.

Uni Walls’ IPO entailed issuing 45.7 million new shares, raising a total of RM7.31 million. Of the total proceeds, 47.9% or RM3.5 million will be used to set up a new factory in Semenyih, Selangor with an estimated total cost of RM13.2 million.

The remaining capital expenditure of approximately RM9.7 million will come from internally generated funds and bank borrowings.

Another 41.2% or RM3.01 million will be allocated for working capital, and the remaining 10.9% or RM800,000 to defray the listing expenses.

While most of the company’s projects are based in Malaysia, it is also looking to expand its presence in Australia. However, in its half-yearly earnings report, Uni Walls said the slowdown of Australia market condition and increase in competition has resulted in a significant decrease in project scale and margin.

For its first half ended June 30, Uni Walls posted a five-fold increase in net profit to RM5.38 million, from RM1.07 million while revenue also increased to RM19.4 million from RM4.7 million previously.

Worst performer: Tashin Holdings Bhd

Tashin Holdings, a steel processor and manufacturer, debuted on the ACE Market on Aug 1, but thus far it has been the worst-performing. Based on its closing price of 27.5 sen on Dec 27, Tashin’s shares have fallen 43.3% from its first-day close of 48.5 sen.

Its IPO entailed an issuance of 59.33 million new shares at 58 sen per share with RM34.41 million raised to build a new factory.

For its third quarter ended Sept 30, Tashin posted a net loss of RM2.8 million, on the back of RM55.3 million in revenue.

Looking ahead, Tashin said the general outlook for the Malaysia economy and business environment for the steel industry, in particular, will remain cautious in view of the US-China trade war.

As local steel manufacturers are facing stiff competition and squeezed margin amid decreased global steel prices, the company said it will adopt a continuous and pragmatic approach in carrying out its business plan.

Most anticipated: Leong Hup International Bhd

Poultry and livestock feed provider Leong Hup returned to the stock market after a seven-year hiatus with a much-anticipated IPO entailing an issuance of up to 937.5 million shares comprising an offer for sale of up to 687.5 million existing shares and a public issue of 250 million new shares.

It raised RM275 million from its listing, which took place on May 16. Based on its closing price of 87.5 sen on Dec 27, the stock has declined 20.5% from its first-day close of RM1.10.

Established in 1978, Leong Hup is involved in the production of poultry, egg and livestock feed across the entire poultry value chain in Southeast Asia such as Malaysia, Singapore, Indonesia, Vietnam and the Philippines.

In 2017, it was the largest integrated poultry producer in Malaysia and one of the top three integrated poultry producers in Indonesia and Vietnam, with a total production of 495.6 million day-old-chicks, 1.7 billion eggs and almost two million tonnes of feed.

It was delisted in April 2012, following the privatisation exercise by Emerging Glory Sdn Bhd, a company owned by the group’s founding Lau family.

For its third quarter ended Sept 30, Leong Hup’s profit rose 26.1% to RM44.38 million from RM35.21 million on the back of improvement seen in its revenue, which grew 7.4% to RM1.53 billion from RM1.42 billion in the corresponding quarter a year ago.

source https://www.thesundaily.my/business/2019-bumper-listing-year-XM1835990