KUALA LUMPUR (May 29): Engineering service company Kawan Renergy Bhd (KL:KENERGY) shares ended their first day of trading on the ACE Market on Wednesday at 46.5 sen each for a 55% gain over the initial public offering (IPO) price of 30 sen.

The counter opened at 45 sen and rose as much as 61.67% to 48.5 sen. At the closing price of 46.5 sen, the company is valued at RM255.75 million.

A total of 148.54 million shares changed hands in the maiden day trading.    

Kawan Renergy raised RM33 million from the IPO, which was oversubscribed by 94.99 times

Kawan Renergy, through its subsidiaries, is principally involved in the design, fabrication, installation and commissioning of industrial process equipment, process plants, as well as renewable energy and co-generation plants.

The company’s engineering solutions are applicable to a wide range of industries, such as food processing, oleochemical, and chemical processing, oil and gas, waste recovery, power plant and utilities. The company is also involved in the business of power generation and sale of electricity.

The company previously said that RM15 million, or 45.5% of the IPO proceeds, will be allocated for working capital requirements of ongoing and future co-generation plant projects, while RM10 million (30.3%) will go towards the repayment of bank borrowings and the defraying of listing expenses.

Another RM5 million (15.1%) will be used to construct a new two-megawatt biomass power plant, and a further RM2.5 million (7.6%) earmarked to improve the production output of the company's Bercham plant, a landfill biogas power plant in Perak, while RM500,000 will be used for the purchase of additional machinery to upgrade the company’s production processes.

Kawan Renergy recorded a profit after tax of RM13.3 million for the financial year ended Oct 31, 2023, down 6.54% from RM14.23 million in the previous year. Revenue dropped 29.31% to RM98.38 million from RM139.18 million, mainly due to lower job orders.

M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.

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