KUALA LUMPUR (June 21): Food ingredient supplier Agricore CS Holdings Bhd (KL:AGRICOR) ended its first day of listing with a 75% gain on Friday, in active trade on the ACE Market.
Agricore closed at 87.5 sen, versus its initial public offering price (IPO) of 50 sen per share. The stock opened at 79 sen, and climbed to as high as 93 sen. At the closing price, Agricore is valued at RM177.45 million on Bursa Malaysia.
The stock was also among the most active, with more than 87.7 million shares changing hands. Friday’s surge lifted its valuations to 19 times its earnings per share of 4.5 sen per share for the financial year ended Dec 31, 2023 (FY2023), from 11 times, based on the IPO price.
Agricore’s first-day pop is the third best so far this year.
Oil and gas services company Keyfield International Bhd (KL:KEYFIELD), listed on April 20, more than doubled its IPO price at the end of its maiden trading day. Building support services firm KJTS Group Bhd (KL:KJTS), meanwhile, racked up an 85.19% gain by the end of its debut on Jan 26.
Agricore raised RM25.9 million from its IPO, which was oversubscribed by 130 times.
The group is mainly involved in the distribution and production of plant-based agricultural food ingredients comprising starch products, beans and pulses, grain products and other related products under its house brands such as Pokok Agricore, as well as third-party brands.
The company also produces and sells food additives and fried shallots under its house brands of Bapas and Cap Pokok.
Upon listing, Agricore said it intends to expand its customer base in the sourcing and distribution business segment, as well as revenue by ramping up inventory levels at its current premises in Bukit Minyak, and set up a new regional storage facility in Klang, Selangor.
“We have fully utilised our warehouse, 100% as of 2023. So, all our stock [is] being sold to our customers, and we need to increase our inventory levels to attend to our customers' needs on an immediate basis,” marketing manager Daniel Tan told the media following the company's listing ceremony here.
Meanwhile, managing director Oon Boon Khong said the new regional warehouse facility — slated for completion in October — will boost Agricore's storage capacity by about 30% to 40% to cater for an additional 70 containers from the current 180 containers.
“On top of that, since certain supplies are heavily reliant on seasonality as well as exposure to price fluctuations, having a higher inventory level in unfavourable market conditions allows Agricore to gain competitive advantage in terms of supplies and pricing strategies,” he added.
Agricore has earmarked 74% of its IPO proceeds (RM18.9 million) for the purchase of inventory and expansion of its sourcing and distribution business, of which RM13.7 million will be utilised for the Bukit Minyak premises, with the remaining RM5.2 million going to a new regional storage facility in Klang.
Additionally, it plans to use 10% of the proceeds or RM2.7 million to set up a new storage facility, also in Klang, with a built-up area of 30,000 sq ft. The remainder of the proceeds will be used for staff recruitment and listing expenses.