KUALA LUMPUR (Nov 11): Mega Fortris Bhd (KL:MEGAFB) made a lacklustre debut on Bursa Malaysia on Monday, becoming the fourth company so far this year to close below the initial public offering (IPO) price on the first trading day.
Mega Fortris closed the day at 65.5 sen, down 2.24% or 1.5 sen from its IPO price of 67 sen.
The seal security manufacturer, backed by Singapore’s Oversea-Chinese Banking Corporation (OCBC), opened flat at 67 sen per share on its Main Market debut.
The eighth most active counter on Bursa Malaysia with 63.72 million shares traded touched an intra-day high of 68.5 sen.
At its closing price of 65.5 sen, Mega Fortris' market capitalisation stood at RM553 million, based on its share capital of 845 million shares.
Mega Fortris is one of four new listings this year which closed below their IPO price on their maiden trading day. So far, Bursa Malaysia saw 42 IPOs this year.
Aside from Mega Fortris, those whose shares underperformed on their Bursa debut include ACE Market-listed Sabah-based integrated property developer KTI Landmark Bhd (KL:KTI), which closed 5% below its IPO price of 30 sen; ACE Market-listed Master Tec Group Bhd (KL:MTEC), which closed 7.69% below its IPO price of 39 sen; and Main Market-listed MKH Oil Palm (East Kalimantan) Bhd (KL:MKHOP), which finished 0.81% below its IPO price of 62 sen.
Mega Fortris manufactures up to 530 million pieces of security seals annually, which are used on boxes of playing cards, containers and cables, to prevent tampering and secure goods during transportation and storage.
“We are excited for what lies ahead, and we remain confident in our ability to deliver high-quality products that ensure the security and integrity of goods during storage and transportation,” Mega Fortris chief executive officer Datuk Ng Meng Poh said during the listing ceremony.
OCBC has a 9.45% stake in Mega Fortris’ holding company and sole selling shareholder Mega Fortris Global Pte Ltd. The second-largest bank in Southeast Asia by assets also has another 16.54% indirect stake through its vehicle Lion-OCBC Capital Asia I Holding Pte Ltd, which is held for investments and is not involved in day-to-day company operations and management.
At its last close of 65.5 sen, the company was valued at a trailing price-to-earnings ratio (PER) of 25.6 times — based on profit after tax of RM21.6 million for the financial year ended June 30 (FY2024).
Out of the total of RM99.07 million to be raised from the public issue, Mega Fortris plans to use 43% of the proceeds to part finance the establishment of new production facilities, including automated production lines for security seals in the UK.
The company has also earmarked 45% of the funds raised for its new business to supply playing cards in sealed security boxes in Macau, China, in providing a total solution in supplying and handling of playing cards in sealed security boxes.
The rest will be used as working capital and to defray listing expenses.
The sale of existing shares under the offer for sale, which raised up to RM99.07 million, was accrued entirely to a private vehicle controlled by Mega Fortris chairman Datuk Nick Ng, and his brother Datuk Adrian Ng, who is also the company’s chief executive.
RHB Investment Bank is the sole principal adviser, as well as joint underwriter and joint placement agent with AmInvestment Bank for the IPO.
