KUALA LUMPUR (Oct 14): EcoSys (Malaysia) Bhd (KL:ECOSYS) more than doubled in its first day of listing on the ACE Market amid strong demand for a piece of the semiconductor services firm.
The stock opened at 70 sen, up 159% or 43 sen above its initial public offering (IPO) price of 27 sen per share. The Penang-based firm climbed to as high as 73.5 sen as more than 84 million shares exchanged hands in less than 10 minutes after the opening bell.
EcoSys’ market capitalisation was RM420 million based on the last price.
Investors appear to be shrugging off worries about overspending in artificial intelligence that had sparked a global sell-off in semiconductor stocks a day earlier.
The strong debut also comes on the heels of a scramble for EcoSys' shares during the IPO with the public tranche oversubscribed more than 200 times. Shares set aside for a group of select investors were also snapped up.
EcoSys raised RM39.34 million from the IPO, which will go towards expansion and operations. There is no accompanying offer for sale, meaning that existing shareholders are not cashing out.
Backed by Solarvest Holdings Bhd (KL:SLVEST), EcoSys’ main business is in the fabrication of precision engineering components and sub-assembly modules used in semiconductor and solar panels manufacturing equipment — a business that contributed more than two-thirds of annual revenue.
However, EcoSys has earmarked RM17 million of the IPO proceeds to buy components for the manufacturing of abatement systems — equipment which treats harmful and toxic gases — and expand the business on the back of rising demand for semiconductors.
The company has also set aside RM4.93 million to acquire other machinery and expand its team. EcoSys has also allocated RM1.54 million to expand its India operations, including setting up a sales and service centre and recruitment.
The rest will be used to repay bank borrowings, as working capital, and to cover listing expenses.
M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO, while Eco Asia Capital Advisory Sdn Bhd is the financial adviser.
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