(From left) Sik Cheong Bhd independent non-executive director Kok Yip Ling, Sik Cheong independent non-executive director Keh Siew Hoon, Sik Cheong executive director Wong Hing Loong, Sik Cheong managing director Wong Hing Ngiap, Sik Cheong independent non-executive chairman Abdul Razak Dato Ipap, Sik Cheong independent non-executive director Thong Kooi Pin, TA Securities Holdings Bhd executive director dealing Sha’ari Mat Hussein, and TA Securities head of corporate finance Dominic Seah at Sik Cheong Bhd’s listing on the ACE Market of Bursa Malaysia on Tuesday. (Photo by Zahid Izzani/The Edge)
KUALA LUMPUR (Aug 13): Shares of cooking oil distributor Sik Cheong Bhd (KL:SCB) surged 85.2% in ACE Market trading debut on Tuesday, following strong demand during the initial public offering (IPO) that raised RM23.22 million.
Sik Cheong opened at 50 sen versus its IPO price of 27 sen apiece, on trading volume of 8.2 million shares. At the opening price, the company had a market capitalisation of RM133 million on Bursa Malaysia.
Tuesday’s pop follows strong demand during the company’s IPO.
The IPO’s public tranche was oversubscribed by 213.53 times. New shares it set aside for eligible persons, as well as selected investors, were fully subscribed. An offer for sale for existing shares was also fully taken up.
Under the public issue of 66 million new shares, 13.3 million was made available to the Malaysian public, four million to eligible directors, employees and persons who have contributed to the success of Sik Cheong, and 48.7 million shares were reserved for private placement to select investors.
Of the proceeds of RM17.82 million new shares, Sik Cheong allocated RM7.18 million for expansion of its packaging facility, RM5.95 million for working capital, RM3.8 million for estimated listing expenses, and the remaining RM890,000 for purchase of new delivery trucks.
The IPO price of 27 sen values the company at 11.35 times its net profit for the financial year ended March 31, 2024 (FY2024) of RM6.33 million, or two sen per share.
Sik Cheong is principally involved in the repackaging, marketing and distribution of refined, bleached and deodorised (RBD) palm olein oil products, comprising mainly cooking oil which is sold under its in-house brands “Sawit Emas” and “Vitamas”, or sold unbranded.
The IPO also offered 20 million existing shares through private placement to select investors, which grossed RM5.4 million, which went entirely to the selling shareholders Wong Hing Ngiap — the managing director, and his brother Hin Loong — an executive director of the company.
The Wong brothers co-founded Sik Cheong, a partnership business registered in 1967, involved in the retail and wholesale of sundry goods. They began delivery of RBD palm olein oil products to customers in 1997, while the partnership ceased its business in May 2018.
TA Securities is the principal adviser, sponsor, sole underwriter and placement agent for the IPO.
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