'Our priority is to enhance production capacity, expand our presence in the semiconductor and electrical and electronics sectors, and drive operational efficiency to create long-term value,' says Chemlite Innovation Bhd executive director and chief operating officer Heng Chee Khiang.
KUALA LUMPUR (March 26): Chemlite Innovation Bhd (KL:CLITE), the latest in a string of listings to have seen first-day dips in share price, is unfazed by its weak debut, preferring to focus on expanding its business and improving efficiency for long-term value.
“We acknowledge that the opening price may not have met initial expectations, but market performance is influenced by external factors," Chemlite executive director and chief operating officer Heng Chee Khiang said.
"Our priority is to enhance production capacity, expand our presence in the semiconductor and electrical and electronics sectors, and drive operational efficiency to create long-term value,” he added.
Chemlite opened 8% lower than its IPO price of 25 sen, extending the recent trend of lacklustre debuts. It is the fifth IPO this month to have debuted lower.
The stock continued to slide, reaching a low of 22 sen during trading before settling back at 23 sen or down 8% at 12.15pm, with over 45.8 million shares changing hands. At this level, Chemlite had a market capitalisation of RM138 million.
Chemlite’s IPO was oversubscribed 28 times by retail investors ahead of its listing.
On its plans post listing, Chemlite financial controller Ng Swee Ping said the company is ramping up its operations with a new production facility that will house at least four fully automated anodising lines and four semi-automated metal plating lines to boost its capacity.
“For metal plating, our current utilisation rate is already above 80%. With the new facility, we aim to increase production capacity by 75% as we add four more metal plating lines. Meanwhile, our non-metal plating segment, which is running at 60%-70% capacity, will see a 200% increase, with the addition of four fully automated anodising lines,” Ng said at a virtual conference after the company listing ceremony on Wednesday.
Chemlite signed a sale and purchase agreement for a parcel of industrial leasehold land, with the acquisition expected to be completed by the second quarter of 2025. Construction of the new facility is slated for completion by the fourth quarter of 2026.
The total acquisition cost is estimated at RM9.75 million, with RM7.80 million funded from its IPO proceeds and the remainder from internally generated funds and/or bank borrowings.
The Penang-based company, which raised RM45 million from its IPO, is also planning a rapid turnaround service to enhance its business operations.
“We are planning for a three-day turnover time for our customers, a significant advantage over competitors. Our focus remains on delivering consistent quality with quick turnaround times to build investor confidence and strengthen our market position,” Ng said.
UOB Kay Hian is the principal adviser, sponsor, underwriter, and placement agent for the IPO.
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