PETALING JAYA: Foundpac Group Bhd made a firm debut on the Main Market of Bursa Malaysia when it opened at 61 sen which was seven sen above its offer price of 54 sen each.
The precision engineering parts fabricator and supplier closed the day 22.22% higher to 66 sen after hitting a high of 68 sen during the day. About 5.23 million shares exchanged hands.
It raised RM21.6mil from its listing exercise which will mainly be used to purchase new machinery and finance its overseas expansion.
The Penang-based company exports its products to Europe and the US, with the US market constituting almost 73% of FoundPac’s sales in financial year 2016.
The group has worked with electronic companies over the years, including Broadcom Corp, which is a US fabless semiconductor company.
Meanwhile, Bernama quoted CEO Lee Chun Wah as saying that the company was happy with the performance of its share price on the first day of trading which was higher than expected.
“In Milan, we are currently working closely with one of the biggest semiconductor players, while in California, our company is heavily involved with the research and development firms located in the Silicon Valley,” Lee said after the listing ceremony.
Lee said this expansion plan would be instrumental to the company’s growth and could further widen its international reach in the future.
Asked on the impact of the weakening ringgit, chief financial officer Ong Choon Heng believed the effect would be minimal as the expenses incurred for the expansion was a one-off setback.
“In the long run, the two offices will help the company generate more income in US dollars,” Ong said.
On the domestic market performance, Lee said the revenue generated from the local market currently is only a small portion of total sales.
“We believe sales will increase as more foreign companies are expected to move to Asia.
“Currently, our products mainly support the semiconductor industry in the US and Europe and when the end products reach Asia such as China, Taiwan and Singapore, it will help boost our local sales,” he said.
To enhance the company’s revenue, Lee said the group was looking at diversifying its customer base to include end-user industries such as the automotive industry.
On Bank Negara’s recent measure requiring exporters to convert 75% of foreign currency proceeds into ringgit, Lee said it was a positive move as the rate offered by the central bank at 3.25% per annum is better than the counter rate, the report added.
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