KUALA LUMPUR (Nov 29): Supreme Consolidated Resources Bhd (KL:SUPREME) ended its first day of listing with a 22% gain, after the frozen food processor’s initial public offering (IPO) on the ACE Market raised RM17.5 million.
The counter closed 5.5 sen higher at 30.5 sen versus its IPO price of 25 sen per share, giving it a market capitalisation of RM131.2 million. The stock opened at 37 sen, a 48% surge, on a volume of 9.26 million shares, and climbed as high as 41.5 sen during the day.
The stock was among the third most active counters of the day on Bursa, with 115.67 million shares changing hands.
Based on its IPO price of 25 sen per share and net profit of RM9.22 million for the financial year ended Sept 30, 2023, the group’s price-earnings ratio stood at 11.9 times.
Demand during its IPO was strong as its public tranche was oversubscribed by 349.42 times. The Bumiputera portion was oversubscribed by 317.38 times, while the remaining public portion was oversubscribed by 381.46 times.
Shares set aside for eligible persons, Bumiputera investors, and select investors offered through private placement were fully taken up.
The Sarawak-based firm, first listed on the LEAP Market in January 2019, is primarily engaged in distributing third-party brands as well as its own brands of frozen and chilled food products such as frozen meat and seafood, ambient food and beverages including milk, pasta and juices, and goods such as detergents and toothpaste.
Supreme Consolidated's customers include wholesalers, food service operators and retailers. Its wholesaler customers are agents, stockists and distributors that supply to other wholesalers, retailers and Horeca (hotels, restaurants and cafes). Its retailer customers, meanwhile, include grocery stores, hypermarkets, supermarkets and sundry shops.
About 63% of the IPO proceeds will be used to part-finance the expansion of the company's warehouse, while the rest will be used as working capital and to defray listing expenses.
The expansion includes an additional distribution centre and catering to more products. There will be a new warehousing area, with cold storage facilities such as a freezer and chiller room, office, loading, and unloading bay.
Kenanga Investment Bank Bhd (KL:KENANGA) is the principal adviser, sponsor, underwriter and placement agent for the IPO.