Rhone Ma stages firm debut on Bursa Malaysia, climbs to 85.5 sen

A delighted Rhone Ma group managing director Dr Lim Ban Keong pointing to the share price on its listing debut. While second from right is its chairman Datuk Hamzah Mohd Salleh.

KUALA LUMPUR: Rhone Ma Holdings Bhd made a firm debut on the  Main Market of Bursa Malaysia Securities Bhd on Monday, rising to a high of 85.5 sen, which was a premium of 10.5 sen over its offer price of 75 sen. It opened at 82 sen.

At 9.09am, it was trading at 82 sen. There were 15.6 million shares done at prices ranging from 81.5 sen to 85.5 sen.

The FBM KLCI fell 4.88 points or 0.3% to 1,632.91. Turnover was 62.25 million shares valued at RM33.54mil. There were 83 gainers, 93 losers and 137 counters unchanged.

Rhone Ma, which also distributes and supplies food ingredients, saw its public offer of 8.30 million new shares oversubscribed by 22.46 times. There were 6,784 applications for 194.749 million new shares with a value of RM146.06mil from the Malaysian public.

Group managing director Dr Lim Ban Keong said although Rhone Ma’s listing marked the end of its IPO journey, “a new chapter awaits us as we bring Rhone Ma to a higher level”. 

“Now that Rhone Ma is listed on Bursa Malaysia, we hope to grow from strength to strength and create value for our shareholders as we now embark on a more challenging growth trajectory aiming for better and higher returns to all our shareholders,” he said

Rhone Ma raised RM31.59mil from the listing exercise.

Most of the funds would be for its capital expenditure which includes the construction of a new GMP-compliant plant in Nilai, Negeri Sembilan and purchase of machinery and equipment as well as the construction of a new warehouse in Kapar, Klang. 

Dr Lim added the local and regional animal health and nutrition markets remain resilient and filled with opportunities. 

“The company is upbeat on the increased demand for its products in tandem with the upward trajectory of the local animal health and nutrition market. 

“Furthermore, the company will continue to leverage on its strong track record to seek for more growth opportunities especially in the regional markets,” he said.

 JF Apex Securities Research had derived a fair value of RM1 for Rhone Ma based on a 33% upside from the listing price of 75 sen. Its valuation was pegged at 12 times FY17 earnings per share (EPS) forecast of 8.4 sen. 

“Our target price-to-earnings ratio assigned is at the higher range of valuation for small cap stocks. 

“We feel the valuation is fair given its favourable position in the animal health and nutrition market with 5.9% market share” it added.