KUALA LUMPUR (April 24): ACE Market-bound Farm Price Holdings Bhd said it intends to expand in Singapore, leveraging the strengthening Singapore dollar against the ringgit for increased market advantage while anticipating a rise in regional demand.
Farm Price managing director Dr Lawrence Tiong Lee Chian said the group is mainly involved in the wholesale and distribution of fresh vegetables, which it receives from both domestic and international markets suppliers, and stores them in a warehouse in Malaysia.
In FY2023, the group sourced 18% of its vegetable supply from local suppliers, while the remaining 82% was sourced from five regional suppliers including Vietnam and Indonesia, among others.
“Our demand in Singapore is growing; we plan to allocate more resources there,” Lee said during the initial public offering (IPO) prospectus launch on Wednesday.
For the financial year ending Dec 31, 2023 (FY2023), the company’s export sales to the region amounted to RM29.08 million or 25.46%, while domestic sales accounted for the remaining RM85.12 million or 74.54%.
However, Farm Price cited the potential risks of its business operations in Singapore to include labour shortages, increasing rental costs and fluctuations in foreign exchange.
Farm Price’s IPO comprises 102 million new shares, representing 22.67% of the group’s enlarged share capital. Additionally, an offer for sale of 33 million existing shares, or 7.33% of the enlarged share capital, is available through a private placement to selected investors.
Priced at 24 sen apiece, Farm Price’s pricing-to-earnings ratio stands at 12.4 times, based on its net profit of RM8.7 million for FY2023. The revenue for FY2023 was RM114.2 million, marking a 21% year-on-year increase.
The application period for the IPO will close on April 30, with the listing scheduled for May 14.
Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO exercise.