PETALING JAYA: The first listing on Bursa Malaysia this year got off to a rousing start.
DPI Holdings Bhd made its debut on the Ace Market at 34.5 sen, 9.5 sen up from its initial public offering (IPO) price of 25 sen.
However, the counter succumbed to profit-taking and closed at 27 sen for a two-sen gain with 128 million shares being traded.
“We will work hard going forward to ensure a better performance,” chairman and managing director Peter Chai told reporters after the listing ceremony yesterday.
The Johor-based aerosol paint-maker’s listing kicked off what could be a more exciting year in the IPO market with potentially three big offerings in the pipeline.
Last week, Malaysia’s biggest home improvement retailer, Mr DIY, was reported to be exploring options to raise between RM1.5bil and RM2bil by selling new shares to investors either in Malaysia or Hong Kong.
Other blockbuster IPOs in the pipeline include QSR Brands (M) Holdings Bhd and Leong Hup International Bhd.
DPI raised RM31.6mil from its IPO.
Chai said yesterday the company aimed to expand into the Myanmar and Vietnam markets by growing its own brand manufacturing (OBM) segment.
“We are currently looking to venture into cleaning products which are more value-added,” he said.
DPI currently distributes canned aerosol paints under its OBM brand names “Anchor”, “DPI” and “Kromoto” to 700 customers in Malaysia.
Chai said the original equipment manufacturer (OEM) segment constituted 15% of the brand’s offering and that the target of the OEM to OBM ratio was depending on “when DPI can achieve economies of scale and provide value-added products (into its product mix)”.
The group offers private manufacturing services to international manufacturers in Australia, New Zealand, Japan and Singapore.
On expansion, Chai said: “We will try to increase our exports with our expansion programme featuring our new factory”.
“Some of our exports currently have better margins and we are confident of the aerosol industry as a whole.”
The company planned to utilise RM23.54mil from the amount raised to raise it production capacity, RM3mil for consumer reach through marketing activities and RM1.3mil would be used for the development of a new product range.
About RM12.63mil would be going into the construction of the new factory with four fully-automated aerosol filling lines which is expected to commence in 2020.
In a previous filing with Bursa Malaysia, DPI recorded a net profit of RM817,000 on a revenue of RM10.05mil for its second quarter ended Nov 30, 2018.
“Our company has a low gearing and good potential growth,” Chai added.
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