PETALING JAYA: Electricity distribution product manufacturer Powerwell Holdings Bhd ended its debut day on the Ace Market with a 14% increase to 28.5 sen, from its initial public offering (IPO) price of 25 sen per share.
Powerwell marks the first Ace Market listing of the year, and the total volume of shares traded amounted to 304.12 million shares.
According to Powerwell managing director Jason Tham, Powerwell has an order book of RM59mil, which will last the group two years.
While Tham was unable to disclose the group’s tender book value, he noted that one of the tenders is the LRT3 project.
“We are also looking forward to commercialising Powerwell’s in-house brand of low voltage switchboards.“I am pleased that Powerwell’s listing exercise ended on a positive note, ” he said.
Powerwell’s core businesses are designing and manufacturing and trading of electricity distribution products including low voltage switchboards, medium voltage switchgear and related products.Powerwell opened at 25.5 sen, which is a 2% premium to its IPO price of 25 sen per share, with an opening volume of 19.72 million shares.
The IPO raised a total of RM21.85mil, of which RM10.27mil has been earmarked for capital expenditure, including the purchase of machinery and equipment as well as the enhancement of Powerwell’s Enterprise Resource Planning systems and hardware.
A RM3.87mil portion of the IPO proceeds will be for certification expenditure while RM3.62mil will be allocated for working capital.
The remaining RM4.1mil will be used to defray listing expenses.
For the third quarter of the financial year ended December 31,2019 (FY19), Powerwell registered a net profit of RM5.24mil, bringing its net profit for the nine months of FY19 to RM7.74mil.
This was on the back of a revenue of RM26.85mil for the third quarter and RM66.37mil for the nine months of FY19.
Powerwell’s largest revenue contributor by geographical region is Malaysia, which contributed 82.6% to the group’s revenue for the first nine months of FY19, followed by Indonesia at 8.5% and Vietnam at 7.1%.
Despite the projects being secured upfront, the group’s revenue is only recognised upon delivery to and the acceptance of products by its customers.
Hence, Powerwell’s revenue is dependent on the issuance of purchase order from customers as well as the timing of delivery and acceptance of the products for the projects.
Mercury Securities Sdn Bhd is the sole underwriter, principal adviser, sponsor and sole placement agent for this listing exercise while BDO Capital Consultants Sdn Bhd is the financial adviser.
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