KUALA LUMPUR: Refined, bleached and deodorised (RBD) palm olein product supplier Sik Cheong Bhd makes its debut on the ACE Market of Bursa Malaysia at 50 sen, representing an 85.2% premium over its initial public offering (IPO) price of 27 sen.
At 9am, the counter saw 8.2 million shares changing hands.
It closed at 36 yesterday and was one of the top three actively traded stocks with a volume of 128.27 million shares.
Managing director Wong Hing Ngiap said the company had raised a total of RM17.8mil from the IPO.
Of the amount, RM7.2mil or 40.3% is earmarked for the expansion of packaging facilities, including the rebuilding of a factory as well as for the purchase of new machinery and equipment.
Additionally, RM0.9mil (5%) is for the purchase of new delivery trucks.
The group also allocated RM6mil (33.4%) for working capital, with the remaining RM3.8mil (21.3%) to cover listing expenses.“With the fresh capital raised, we are poised to embark on our next phase of expansion,” he told a press conference following the company’s listing ceremony here.
When asked if the stronger ringgit had impacted the company’s ability to mitigate raw material costs, Wong said it had yet to affect the company’s operating costs as it was a recent event.
In a statement, the company said it planned to expand its geographical reach into other states such as Perak, Negri Sembilan, Melaka and Pahang.
“With the states’ proximity to Kuala Lumpur and Selangor, where Factory No. 11 is located, the group can efficiently extend its sales and distribution capabilities.
“The group will also increase its fleet of delivery trucks to ensure timely and reliable deliveries – critical for maintaining customer confidence as edible oil is an essential ingredient for food preparation.
Asked about the expected easing of crude palm oil (CPO) prices in the third quarter and high operating costs, Wong said the key strategy for the company is managing its turnover rate.
“We maintain a very short turnover rate. Costs are quickly offset by sales to customers, which will help us manage the volatility in CPO prices.
“Additionally, if costs increase, we can pass the increases on to the customers by frequently revising our selling prices,” he said.
He added that the company’s current stock turnover rate is five to seven days.
Sik Cheong offers cooking oil brands such as Sawit Emas, Vitamas and lamp oil under the Pingat Emas brand among other products. — Agencies
