Kawan Renergy leaps 50% on ACE Market debut

KUALA LUMPUR: Kawan Renergy Bhd's shares jumped 50% as it made its debut on the ACE Market of Bursa Malaysia after an initial public offering (IPO) that raised RM33mil.

The engineering solutions provider opened at 45 sen a share, a 15 sen premium over its IPO price of 30 sen a share, and rose to as high as 47 sen a share.

At 9.40am, the stock had eased to 45 sen a share after 89.78 million shares had changed hands.

Kawan Renergy’s IPO involved an offer of 144.5 million ordinary shares, including 110 million new shares representing 20% of the enlarged share capital and an offer for sale of 34.5 million existing shares, or 6.3% of its enlarged share capital, by way of private placement to selected investors.

The public portion of Kawan Renergy's IPO was oversubscribed 94.99 times while the 19.3 million shares made available for application by eligible persons was also fully subscribed.

The company’s products are used for a wide range of industries such as food processing, oleochemicals, and chemical processing, oil and gas, waste recovery, power plant and utilities.

Of the proceeds raised from the IPO, RM15mil has been allocated for working capital for projects while another RM7.5mil has been allocated for the investment of a new 2MW power plant and output improvements for its Bercham plant.

A further RM500,000 will be used to purchase additional machinery to upgrade the company’s production processes, and RM10mil will go towards the repayment of bank borrowings and listing expenses.

In its most recent results announcement, Kawan Renergy registered a net profit of RM4.2mil in the first quarter ended Jan 31, 2024, on the back of revenue of RM19.95mil.

The company posted a profit after tax of RM13.3mil in FY23 ended Oct, 31, 2023, as compared to RM14.23mil in FY22 on revenue of RM98.38mil against RM139.18mil in the preceding year.