KUALA LUMPUR (Nov 13): Sabah-based beverage manufacturer Life Water Bhd (KL:LWSABAH) made a strong debut on Bursa Malaysia’s Main Market on Wednesday, closing 44.6% higher at 94 sen or up 29 sen from its initial public offering (IPO) price of 65 sen.
The counter opened at 77 sen and climbed to an intraday high of 94 sen, marking a 22% increase during the trading session, after 233.41 million shares were traded, making it the most actively traded stock of the day.
Demand for Life Water shares was strong ahead of the listing, with the public portion of the IPO oversubscribed by some 32 times. Shares set aside for subscription by eligible persons were also fully taken up, and so were the shares for identified Bumiputera investors through private placement.
Also fully taken up were new shares the company wanted to place to selected investors, as well as the tranche of existing shares offered by placement.
Life Water primarily manufactures beverages, including drinking water and carbonated drinks, and is also involved in plastic packaging production, delivery, and distribution services, with main operations in Sabah.
At the closing price of 94 sen, Life Water had a market capitalisation of RM444.79 million, based on its 473.18 million issued shares post-listing. The stock is valued at a price-to-earnings ratio of about 16 times, based on its profit after tax of RM28.1 million for the financial year ended June 30, 2024 (FY2024).
The sale of new shares raised RM63.4 million, which will be allocated towards several projects, including a new drinking water manufacturing line at Sandakan Sibuga Plant 1, another line at Sandakan Sibuga Plant 2, and a second distribution centre in Sandakan.
Life Water also plans to expand its plastic packaging facilities in Kota Kinabalu with the IPO proceeds, finance working capital, and defray listing expenses.
Strategic plant distribution to counter supply disruption
The company currently depends on only one single source of public water supply.
To counter potential disruption of water supply, the company said it has four manufacturing facilities spread across the state, while maintaining a minimum seven-day stock of water, managing director Liaw Hen Kong said during a conference after the listing ceremony here.
The company has more than 75 delivery trucks and external logistics partners to ensure timely distribution even to remote areas, he noted.
Life Water currently has three manufacturing plants producing up to 389 million litres of drinking water and 37 million litres of carbonated drinks and fruits. The new plant in Keningau to be operational by year end will increase the annual capacity to 448 million litres of drinking water.
Liaw highlighted that Plant 2 in Kota Kinabalu Industrial Zone 8, slated for completion in 2027, will introduce advanced manufacturing processes and expand the company's packaging capabilities.
Further, Life Water aims to deepen its market penetration into Sarawak and Brunei by appointing local distributor agents. The company’s strategy includes a new warehouse facility in Tawau, located near the Kalimantan border, to tap into the growing demand in East Malaysia and beyond, he said.
Liaw added that the company’s recent automation initiatives had mitigated the impact of an increase in wages.