KUALA LUMPUR (July 3): Just a day after UUE Holdings Bhd’s (KL:UUE) successful initial public offering (IPO), Go Hub Capital Bhd (KL:GOHUB) has followed suit with its impressive debut on Bursa Malaysia.
The information technology (IT) services provider took second place as the best performing IPO year-to-date, after UUE. Go Hub surged 171.43% to close at 95 sen on Wednesday, versus its initial public offering price (IPO) of 35 sen per share. The stock opened at 80 sen and climbed to as high as 99 sen.
Trading volume rose to 143.1 million, making it the most active stock and second biggest gainer on Bursa.
At its closing price, Go Hub is valued at RM380 million surpassing its expected market capitalisation of RM140 million during its prospectus launch.
Go Hub’s issued share capital stood at 400 million shares. The company offered 107.18 million shares for its listing exercise.
The company’s IPO saw its public tranche oversubscribed by 78.71 times. The Bumiputera portion was oversubscribed by 64.65 times while the remaining public portion was oversubscribed by 92.76 times.
Shares set aside for eligible persons, Bumiputera investors, and select investors offered through private placement were fully taken up.
Go Hub is principally involved in providing enterprise IT services primarily to the transportation sector. It develops customised software systems and provides integration of hardware and software systems in the bus and rail segments.
The company plans to utilise the proceeds raised from the IPO for its expansion plan (RM24.7 million), repayment of bank borrowings (RM4 million), working capital (RM4.8 million) and listing expenses (RM4 million).
Of the allocation for its expansion plan, Go Hub has earmarked RM10.1 million for up to 49 new staff, RM6.5 million for equipment and tools, and RM3.7 million for a new office building as its new headquarters.
The remainder will be used to set up a new integrated centre, for design and development, and for other expenses.
UOB Kay Hian Securities is the principal adviser, sponsor, underwriter and placement agent for the listing exercise.
Tendering more projects to expand client base
As of May 2024, Go Hub is bidding for six projects totalling RM35.64 million from the public and private sectors to provide IT solutions to the public transport industry and diversify its client base in order to maintain its financial performance.
“This not only mitigates our dependency on any single client but also aligns with our strong market presence where we already service a significant portion of the bus terminals in Peninsular Malaysia,” Go Hub executive director and chief executive officer Tan Cherng Thong told The Edge after the listing.
“We have also been invited to perform various preliminary studies and proof of concept for other projects for which the project value cannot be ascertained at this juncture,” Tan said.
Go Hub is currently dependent on its major customer, Keretapi Tanah Melayu Bhd (KTMB) as the company has been providing transportation IT solutions to the national rail operator since 2019, with contracts contributing about 69% of Go Hub’s revenue in FY2023.
Additionally, the group is currently working with the Sabah Port Authority to implement transportation IT solutions at state ferry terminals. The Sabah Port Authority aims to fully implement the Go Hub solution by March 2025.