Smart Asia Chemical jumps 25% on ACE Market debut

KUALA LUMPUR: Smart Asia Chemical Bhd rose 25% at the start of trading on the ACE Market of Bursa Malaysia following an initial public offering (IPO) that was 33.8 times oversubscribed.

Shares in the industrial paint and coating manufacturer opened 10 sen over its IPO price to 50 sen a share, but eased to 48 sen a share at 9.10am after 27.94 million shares were traded.

Smart Asia Chemical primarily focuses on developing, manufacturing, distributing, and selling a diverse array of decorative paints and protective coatings for both household and industrial use.

Of the RM37.5mil raised from its IPO, the group earmarked RM16mil to finance the construction of a plant in Perak and RM11mil to part finance the purchase and commissioning of an automated paint production system in the plant.

Another RM5mil was set aside for the purchase of 250 sets of a smart colour POS (point-of-sale) tinting machine while the remainder will be utilised for working capital and listing-related expenses.

Smart Asia said the establishment of the plant in Batu Gajah, Perak, is to streamline its manufacturing operations as well as to increase manufacturing activities especially when its existing facility in Johor has reached full capacity.

The Perak plant will be focusing on the manufacturing of water-based decorative paints and protecting coating and its total estimated construction cost is about RM28.20 million.

In the first quarter ended March 31, 2024, Smart Asia posted a net profit of RM9.5mil on revenue of RM23.96mil.

There are no comparative figures for the preceding year corresponding quarter as this was the first interim financial report prepared in accordance with Bursa Malaysia's listing requirements.