KUALA LUMPUR (Sept 4): Vetece Holdings Bhd (KL:VTC) was the most active stock on Wednesday, though the share price of the newly listed enterprise software company was volatile amid strong interest.
The stock rose as much as 6% or four sen to 63.5 sen before slipping to as low as 53 sen. The counter was trading at 54.5 sen at 3.45pm, giving the company a market capitalisation of RM214 million. Trading volume totalled 94.8 million shares, nearly 25% of its total shares outstanding.
No institutional analyst covers the stock.
Shares of Vetece have exceeded the fair value of 30 sen to 46 sen assessed by Public Investment Bank, Mercury Securities, and Apex Securities in non-rated notes ahead of its listing on Aug 28. The stock have also more than doubled from its initial public offering price of 25 sen apiece.
The surge added some RM70 million to the value of shares held by Tee Chee Chiang, the executive vice chairman and single-largest shareholder of Vetece.
Tee is required to hold on to his 240.38 million shares, equivalent to 61.32% of Vetece, for at least six months from the listing date. He has already pocketed RM9.8 million from an offer for sale of his existing shares in Vetece.
Meanwhile, Vetece chief executive officer Chan Wai Hoong, who holds 3.36% of Vetece, voluntarily subjected his shares to a moratorium for six months, along with chief financial officer Yeoh Kim Kooi, who has a 0.1% stake.
Vetece mainly provides software for businesses, including implementation, maintenance, support and professional services, as well as resale of hardware and software. The company’s clients are mostly in the telecommunications and financial services industries.
Telekom Malaysia Bhd (KL:TM) is the single-largest client for Vetece, accounting for more than half of its revenue so far this year. The company also counts Telstra Corp Ltd in Australia and banks in Malaysia as its clients.
Demand sharply exceeded available shares for subscription, with the public issue oversubscribed 187 times during the IPO that grossed RM34.3 million. Shares offered through private placement to select investors was also fully taken up.
The sale of new shares raised RM24.5 million, and about 27% of the funds has been set aside to pay hardware and software licensing fees. The company has also earmarked about 9% of the proceeds for rollouts of new core products and services, and 13% to strengthen its Singapore operations.
Vetece also budgeted 15% of the proceeds for the establishment of a centre of excellence for software, 16% for loan repayment, and the rest to defray estimated listing expenses.