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KUALA LUMPUR: Southern Cable Group Bhd made a firm debut in the ACE market on Friday and rose to a high of 38.5 sen, or 4.5 sen above its offer price of 34 sen in early trading.
At 9:10 a.m. M., was trading at 36.5 sen, an increase of 2.5 sen. 161.62 million shares were carried out at prices ranging from 33 sen to 38 sen.
The FBM KLCI was up 4.25 points or 0.28% to 1,518.20. The turnover was 443.73 million shares valued at RM 237.24 thousand. There were 256 winners, 127 losers, and 285 unchanged counters.
Group Managing Director Tung Eng Hai said Southern Cable aims to enter the automotive and elevator segments by the second half of 2021 by introducing a new range of products, including power and control cables and wires for automotive and elevator applications.
For the financial year ended December 31, 2019 (fiscal year 2019), 76.1% of the group’s income was contributed by power cables and wires, while 5.4% was from cables and wires communications.
The sale of control and instrumentation cables and wires represented 9.4% of revenues and the remaining 9.1% was from the sale of related products and services.
The new range of cables and wires for the automotive and elevator segments is expected to be developed and commercialized in the second half of 2021.
“As a wire and cable supplier with key supporting activities such as furnaces and continuous casting, as well as plastic composite manufacturing for our wire and cable manufacturing operations, we can quickly adapt to market changes and develop new products to expand our reach. “, He said. it said in a statement.
Tung said the new factories would allow the company to expand annual cable and wire production capacity.
The expansion was crucial, as it aimed to increase its market share of electrical and electronic wire and cable manufacturing in Malaysia.
“These initiatives would allow us to address the growing market opportunities in Malaysia, as well as in the countries where we have already made progress and underpin our hope to continue our growth story,” he said.
From FY2016 to FY2019, the group posted a three-year compound annual revenue growth rate (CAGR) of 11.7% from RM470.7k to RM656.7k. Its net profit reported a CAGR of 26.4% from RM14.2 thousand to RM28.5 thousand in the same period.
The group’s order book stood at RM405.4 thousand as of September 1, which includes the secured contracts of Tenaga Nasional Bhd
and Telekom Malaysia Bhd.
The book order will hold the group’s earnings through the financial year ending December 31, 2022.
Southern Cable will adopt a dividend policy to distribute at least 15% of its after-tax audited annual earnings attributable to shareholders as dividends, subject to business performance and board recommendation.
Its public issuance involved 209.34 million new shares, which allowed it to raise RM71.17 thousand.
Under public issuance, 40 million shares offered to the public were oversubscribed by 10.5 times. It also put 20 million existing shares up for sale.
Of the RM71.17 thousand collected from the IPO, Southern Cable would use RM30 thousand for capital and expansion expenses, RM27.5 thousand for working capital, RM9.2 thousand to pay bank loans and RM4.5 thousand to defray listing expenses.
At an IPO price of 34 sen per share and based on all the expanded issued share capital comprising 800 million shares, its market capitalization is RM272 thousand.
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