This article first appeared in Capital, The Edge Malaysia Weekly on September 29, 2025 - October 5, 2025

CAMAROE Bhd is set to debut on the ACE Market of Bursa Malaysia on Thursday (Oct 2). With an issue price of 14 sen per share and a target to raise just over RM20 million from its initial public offering (IPO), this will be one of the smallest IPOs on Bursa this year.

The prawn farming and processing company is offering 99 million shares in the public issue, aiming to raise RM13.86 million to fund its business expansion. Additionally, two shareholders — managing director Teoh Han Boon and executive director Low Saw Cheng — are selling a total of 49.5 million existing shares, which are expected to fetch RM6.93 million.

The IPO attracted strong interest recently, with the company receiving applications for 402.4 million shares worth RM56 million, representing an oversubscription rate of 15.26 times. The bumiputera allocation was oversubscribed by nearly seven times, while non-bumiputera orders saw an oversubscription rate of nearly 23 times. Shares reserved for eligible persons were fully subscribed.

However, a private placement of new shares to approved bumiputera investors was undersubscribed and had to be reallocated to other investors. Meanwhile, the 49.5 million offer shares available to selected investors through private placement were fully taken up.

Founded in 2009, Camaroe currently operates 138 ponds across five coastal prawn farms and a processing facility in Kapar, Selangor. The company mainly processes live and frozen black tiger prawns, both head-on shell-on and peeled, for local wholesalers and international buyers in China, South Korea and Taiwan.

In the financial year ended Dec 31, 2024 (FY2024), 24% of Camaroe’s revenue was generated domestically, with the remaining 76% coming from overseas buyers.

The company plans to allocate RM8 million or 57.72% of the IPO proceeds to expand operations at its new Bukit Raja prawn processing facility in Selangor. This includes construction, machinery and equipment purchases, and installation of solar panels. The new 100,000 sq ft facility, which will be more than 3.5 times the size of the current Kapar plant, is slated to begin construction in the third quarter of 2026.

Camaroe also aims to establish an in-house biotechnology department at its Kapar facility by 3QFY2025, with plans to relocate it to Bukit Raja in 1QFY2029. This initiative is intended to enhance prawn farming operations and potentially create a new revenue stream through successful research and development, and commercialisation.

The company’s earnings grew steadily from FY2021 to FY2023, rising from RM7.83 million to RM11.7 million, before declining 31% to RM8.07 million in FY2024. Revenue increased slightly from RM38.18 million in FY2021 to RM39.82 million in FY2024.

For the financial period ended March 31, 2025 (FPE2025), net profit came in at RM637,000 on revenue of RM8.22 million, affected by shipment delays due to new labelling standards in South Korea. However, the company has said the lower export numbers to South Korea is only a temporary setback.

PublicInvest Research is forecasting a three-year net profit compound annual growth rate (CAGR) of 8%, with net profit expected to reach RM9.8 million by FY2027. This growth will be driven by rising overseas demand, particularly from China, and supported by the establishment of an in-house biotechnology department that ultimately enhances prawn farming operations, health and yield.

“This projection is underpinned by an expected revenue CAGR of 2%, supported by steady growth in seafood consumption in China, South Korea and Taiwan as product traceability and antibiotic-free certification are crucial for food security reasons,” the research firm says in a Sept 11 report.

It adds that the forecast also assumes that the group is able to maintain a gross profit margin of 33%, supported by improved operational efficiency and pond utilisation following the establishment of an in-house biotechnology department.

PublicInvest Research assigns a fair value of 18 sen per share to Camaroe, based on a price-earnings ratio (PER) of 10 times FY2026 earnings per share (EPS). This represents a 20% discount to the peer group’s weighted average PER of 12 times, which the research house considers reasonable given the company’s relatively small market capitalisation despite decent profit margins. 

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