Kelington’s warrants B double on listing

Kelington is riding on the booming semiconductor industry.

KUALA LUMPUR: Kelington Group Bhd’s warrants B doubled to 30.5 sen when they were listed on Tuesday amid the strong prospects for the company whose ultra-high purity (UHP) gas delivery solutions for the electronics and semiconductor industry.

At midday, the warrants B were trading at 30.5 sen, up 15.5 sen. There were 4.02 million units traded.

However, the share price fell four sen to RM1.24 on some profit taking. There were 1.70 million shares done at prices ranging from RM1.22 to RM1.29.

The company issued 214.33 million warrants B to the existing shareholders on the basis of one warrant for three shares held as at July 22.

The conversion period is five years and they mature on July 24, 2026.

The exercise/conversion ratio is one for one. The strike price is RM1.38.

Kelington is riding on the booming semiconductor industry as its gas delivery systems are used to safely reduce gas pressure from higher pressure cylinders to supply process tools and various instruments in a semiconductor facility.

Besides UHP, Kelington is also involved in process engineering (PE). About two years ago, it ventured into the industrial and specialty gases business, a segment its management believes could morph into a solid earnings driver going forward.

StarBizWeek recently reported that as the chip industry cranks up investments to meet demand, Kelington’s order book replenishment has been good, with the value of new orders hitting a record high of RM490mil in the financial year ending Dec 31, 2020 (FY20).

In a recent interview with StarBizWeek, chief executive officer Raymond Gan Hung Keng, he said:

“Up till July 2021, the group has secured new orders amounting to RM195mil, and this has raised our current outstanding order book to RM454mil across our operating markets in Malaysia, Singapore, China and Taiwan.”

Gan had stated the company will focus on executing these jobs and recognition of progress billings will contribute positively to its financial performance in 2021, which kicked off to a good start with net profit rising more than one-third year-on-year (y-o-y) to RM5.54mil in the first quarter (Q1).

Revenue, meanwhile, increased 24% y-o-y as the company’s operations in Malaysia doubled, while the China side grew 47%.

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