KUALA LUMPUR (Jan 29): Newly listed gas monitoring firm One Gasmaster Holdings Bhd (KL:OGM) sees growth opportunities if the government expands its carbon tax beyond heavy industries, as the firm helps companies measure and manage their emissions.
“The government is focusing on heavy industries [for the carbon tax], but our clients have already started engaging us [on this matter]. We hope the policy [will eventually be expanded] to cover a wider range of industries, which can (have) potential benefits for us,” One Gasmaster managing director and chief executive officer Ivan Tan Kean Yok told reporters after the company’s listing ceremony on Bursa Malaysia on Tuesday.
He added that the current policy’s focus on heavy industries limits the potential impact of carbon pricing, as accurate emissions monitoring and reporting are also critical for other industries.
WATCH: One Gasmaster talks upside from carbon tax expansion
One Gasmaster mainly provides environmental monitoring, gas detection and gas piping services, as well as industrial hygiene, maintenance and calibration services, and the trading of related products.
“Carbon tax is based on the volume of emissions released. To be taxed, emissions have to be measured and quantified, and that is where our solutions come in,” Tan said.
The call comes as the government is still finalising details of the proposed Climate Change Bill, which is expected to provide the legal framework for Malaysia’s transition to a low-carbon economy. The bill is anticipated to include provisions on emissions monitoring, reporting and verification, as well as a long-awaited carbon tax framework.
Industry discussions have centred on the potential tax rate, with some quarters suggesting a benchmark similar to Singapore’s initial rate of S$5 (about RM15.70) per tonne of carbon emissions.
On pricing concerns, Tan said the carbon tax itself is unlikely to materially affect One Gasmaster’s business, as the group’s role is focused on emissions measurement rather than tax costs.
“We are not directly impacted by [how high] the tax rate is. However, on our side, we are measuring the quantity of carbon emissions in terms of volume, and reducing the volume is always the industry priority,” he added.
One Gasmaster opened 6% lower on its debut, falling to 23.5 sen from its initial public offering (IPO) price of 25 sen. At the time of writing, the stock stood at 21.5 sen, still down 3.5 sen or 14%, with 29.22 million shares traded, giving it a market capitalisation of RM66.65 million.
At the current price, the group is valued at a price-to-earnings ratio of about 12 times, higher than comparable peers such as Favelle Favco Bhd (KL:FAVCO), which trades at 5.8 times, and Muhibbah Engineering (M) Bhd (KL:MUHIBAH) at 4.2 times, based on AskEdge data. The comparison is made through their respective exposure to environmental testing directly and indirectly via Exact Analytical Sdn Bhd.
Tan told reporters that the company "remains confident with its long-term business fundamentals" despite short-term market fluctuations on its initial listing. He further noted that the current stronger ringgit could benefit the group by lowering procurement costs, as some of its materials are imported.
The company raised up to RM23.26 million from its IPO, comprising RM19.38 million from the issuance of new shares and RM3.88 million from an offer for sale, which went to selling shareholders.
Of the IPO proceeds from new shares, about RM3.8 million, or 19%, has been allocated for expansion into emission control solutions, including the acquisition of new instruments and the hiring of two senior project engineers.
Another 25% will be used to establish new branch offices in Johor, Terengganu and Penang, while 26% has been earmarked for working capital. The remaining funds will go towards setting up a new calibration laboratory at its Damansara office and covering listing-related expenses.
Tan remains the controlling shareholder of One Gasmaster, while his wife, Tan Bee Sien, has reduced her stake to 5.2% from 13.6% following the offer for sale. She does not hold any executive role in the company.
Malacca Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.
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