KUALA LUMPUR: The trading stock of TechStore Bhd
jumnped 27.5% as it commenced trading on the ACE Market following a successful initial public offering (IPO) that raised RM25mil.
Shares in the enterprise IT security and automated solutions provider were up 5.5 sen apiece to 25.5 sen in active trading, which saw 89.5 million shares change hands in 20 minutes.
Techstore has been a key service provider for Setia Utama, the main contractor of the Light Rail Transit 3 (LRT3) project, since 2019, which contributes 30.7% to the company's total revenue.
It is currently executing automatic fare collection and electronic access control system contracts under LRT3, with completion targeted for August 2025.
In addition to this, the National Transport Policy (NTP) 2019-2030, which supports infrastructure digitalisation and automation, further expands Techstore’s role within the nation’s public transport projects
As at Dec 31, 2024, Techstore has an outstanding order book of RM104.7mil and a tender book of RM647.2mil.
Techstore said previously it would grow its business by directing RM11.5mil of its IPO funds to working capital to support future projects and employee-related costs.
An additional RM2.7mil will go towards the recruitment of business development personnel while RM2.3mil will be allocated for capital expenditure on equipment, computers, hardware, IT software, and the establishment of a new branch office in Johor Baru.
Of the remaining funds, RM5mil will be used to repay bank borrowings and RM3.5mil will be used for estimated listing expenses.
Touting the long-term growth prospects of Techstore, brokerage Rakuten Trade has a "buy" call on the stock with a fair value of 35 sen a share.
"Overall, Techstore maintains a strong balance sheet with anet cash position, ensuring financial stability and positioning the company for long-term growth post-listing," it said in its IPO note.
