KUALA LUMPUR (March 27): Calcium carbonate producer Zantat Holdings Bhd ended its maiden trading day on Bursa Malaysia’s ACE Market at 37.5 sen, a premium of 12.5 sen or 50% over its initial public offering (IPO) price of 25 sen.
The counter surged by as much as 17 sen or 68% to 42 sen, after opening at a premium of 15 sen or 60% to 40 sen. It was the most active stock on Bursa Malaysia with 92.91 million shares traded.
At 37.5 sen per share, the group is valued at about 12.5 times its price-earnings ratio, based on a net profit of RM6.77 million and basic earnings per share of three sen for the financial year ended Dec 31, 2023 (FY2023). Its market capitalisation stands at RM105 million, based on a share capital of 280 million.
Looking ahead, managing director Ivan Chan said the group expects the glove industry which has been in oversupply, to recover in the second half of the year, and that this would generate extra revenue for the company, as its products are used as fillers in the industry.
He also expected demand from India to remain strong. India accounts for 60% of Zantat's total revenue.
“As for our new [bioplastic] products, we are planning to expand our footprint to Australia, New Zealand and Europe. We are collaborating with strategic partners to produce compostable garbage bags, which will be exported to these countries, hopefully by this year,” he told the press after the listing ceremony on Wednesday.
Zantat Perak Plant 1, whose products are primarily exported for the plastic industry in India, achieved an average utilisation rate of 94% for the nine months ended Sept 30, 2023 (9MFY2023).
However, Zantat Perak Plant 2, which is used to produce bioplastic compounds, recorded a utilisation rate of 28% during the same period.
“This is why we are expanding the research and development (R&D) facilities to boost sales and the utilisation rate of the plant,” said Zantat’s executive director Chan Jee Chet.
However, Chan said that the company is finding it difficult to recruit talent for its R&D facilities, primarily due to the specialised nature of the industry. He hopes the company’s listing status would now make it more appealing to potential talents.
In a March 18 bourse filing, Zantat said it posted a net profit of RM1.1 million or 0.5 sen per share for its fourth quarter ended Dec 31, 2023 (4QFY2023), on the back of RM31.7 million in revenue.
There were no comparative figures for the corresponding quarter a year ago, as it was the first interim financial report announced by Zantat, in compliance with listing requirements.
Zantat's IPO was oversubscribed by 130.15 times, its public portion attracting RM459.01 million worth of orders, or about 33 times the RM14 million that it aimed to raise from the offering.
M&A Securities was the adviser, sponsor, underwriter and placement agent for the IPO.