KUALA LUMPUR (May 2): Shares of Reach Ten Holdings Bhd (KL:REACHTEN) ended its first day of listing with 3.85% gain, snapping a streak of first-day flops on Bursa Malaysia.

The Kuching-based telecommunications services firm opened at 52 sen — the same as its initial public (IPO) price — before falling to a low of 50 sen. The stock recovered within 10 minutes and climbed to a high of 55.5 sen before closing at 54 sen after more than 133 million shares changed hands.

At its closing price, the company has a market capitalisation of RM540 million and a trailing price-earnings ratio (PER) of 8.43 times.

Bursa Malaysia has hosted seven ACE Market listings since March and all sank below their IPO prices amid international trade tensions. Reach Ten is the third Main Market listing since then, and one of only two to buck the trend.

“As part of our expansion plan, we are committed to strengthening our infrastructure by expanding our fibre-optic network coverage, enhancing satellite capabilities, and developing innovative digital solutions,” Reach Ten managing director Leo Chin said during the listing ceremony.

At 52 sen per share, the IPO raised RM156 million for the company and its shareholders. The issue of new shares to public investors was oversubscribed 1.85 times.

Reach Ten operates across three business segments — satellite-based communications, fibre-optic networks, and telecommunications infrastructure — with revenue derived from both one-off project-based fees, and recurring broadband and managed services income.

More than half of the RM104 million estimated proceeds from the sale of new shares has been earmarked for the expansion and the establishment of fibre-optic communication network infrastructure.

Reach Ten is also setting aside RM25 million to construct an additional 100 telecommunications towers in Sarawak, particularly in Miri, Sibu and Bintulu, to support the state government initiatives.

The company also plans to use RM4.3 million to enhance its satellite-based communication networks and service capability by acquiring additional mobile and fixed satellite terminals, hardware and software, as well as enhancing its facilities in the teleport.

The remainder of the proceeds will be used for working capital requirements, repayment of bank borrowings, and to defray the estimated listing expenses.

Reach Ten owns and operates a fibre-optic communication network infrastructure in Kuching and Samarahan, spanning about 217km of infrastructure and 649km of cable link communication networks.

Meanwhile, the sale of existing shares grossed about RM52 million, which will accrue entirely to Chin, executive directors Lu Pak Lim and Wong Kiing Ting; and Eddryson Effe Kuehjin Anak Bika, who is a director at three of the company’s subsidiaries.

M&A Securities is the principal adviser, underwriter and placement agent for the IPO.

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