KUALA LUMPUR: Sheet metal product manufacturer and scaffolding supplier BWYS Group Bhd's shares surged more than 65% on its debut on the ACE Market of Bursa Malaysia, showing strong investor demand in the new stock despite a lacklustre market.
The group, whose share offering to the Malaysian public was 48.51 times oversubscribed, raised RM56.4mil from its initial public offering (IPO).
BWYS shares began trading at 32 sen apiece as compared to its IPO Price of 22 sen.
Subsequent strong buying interest took the share price to a high of 36.5 sen a share, representing a 14.5 sen increase over its IPO price of 22 sen.
As at 9.24am, there were 152.94 milion BWYS shares traded, making it the most actively traded counter on Bursa Malaysia on Monday.
With the funding from the IPO, BWYS is set to expand its operations and boost production capacity with a new factory in Penang, covering a total built-up area of about 197,153 sq ft.
Additionally, BWYS said it will acquire new machinery, including roll forming machines for the Banting factory and equipment for roof truss and industrial racking system manufacturing.
Upon completion, the Penang factory will increase the company’s production capacity to 147,147MT and warehouse capacity to 150,231 sq ft.
Rakuten Trade in its IPO note said it forecasts net earnings growth for BWYS given the expansion plans.
"Given the expansion of capacity, the rollout of new products, and increasing demand for building materials, we foresee BWYS posting net earnings of RM22.3mil and RM27.6mil for FY24 and FY25, respectively," it said.
The research firm put out a "buy" call on the stock with a fair value of 40 sen a share based on a 15x price-earnings ratio over FY25 earnings per share.
