KUALA LUMPUR (Feb 13): Hock Soon Capital Bhd (KL:HOCKSOON) fell in its Main Market trading debut on Friday after underwhelming investors demand during its first share sale.
The stock opened at 53 sen compared to its initial public offering (IPO) price of 60 sen per share. The egg producer dived to as low as 50.5 sen during the trading session before closing at 56 sen after 64.18 million shares changed hands.
At the last price, Hock Soon had a market capitalisation of RM280 million.
Interest from public investors were subdued during the IPO with applications barely above the number of shares available for subscription while a private placement was undersubscribed and had to be reallocated.
Based in Perak, the family-run company specialises in the rearing of layer chickens for the production and sale of table eggs. Hock Soon sells its eggs unbranded, under its in-house Qplus label, or as third-party brands for its customers.
The IPO raised RM90 million, of which RM60 million went to Hock Soon to fund expansion, and the remaining RM30 million was pocketed by the founding Ong family.
Hock Soon plans to build 25 chicken coops at the new farm in Teluk Intan, and expand its feed mill and egg grading facilities. Once completed, the farm is expected to produce up to 1.53 million eggs per day and nearly double the existing capacity.
Current shareholders who cashed out part of their stakes include managing director Ong Boon Leng, his wife and executive director Lim Suk Gen as well as their children Keat Hoe and Keat Qian. Both siblings are also executive directors of Hock Soon.
“We should focus on the expansion plan because I believe we have strong fundamentals and also a good growth trajectory,” Keat Hoe told reporters at the listing ceremony when asked about the company’s share price performance.
M&A Securities is the principal adviser, underwriter and placement agent for the IPO.