KUALA LUMPUR: This year’s last listing on Bursa Malaysia, FoundPac Group Bhd, made a strong debut on the Main Market yesterday.
FoundPac closed at 66 sen, a 22.22 per cent premium over its offer price of 54 sen, outperforming the FTSE Bursa Malaysia KLCI benchmark.
The key index closed at 1,637.93 points, 0.47 per cent higher than Wednesday’s close of 1,630.30.
FoundPac, which opened at 61 sen, saw 52.3 million shares changing hands.
Public Investment Bank has a fair value of 63 sen for FoundPac, implying an upside of 17 per cent from the company’s listing price.
The precision engineering parts fabricator had a further upside potential on the back of the weakening ringgit against the US dollar, said analysts.
“FoundPac and other manufacturing companies with significant overseas exposure would continue to outperform on the rising US dollar trend as a stronger US dollar translates into cheaper exports. This offers FoundPac a potential upside in the long term.
“FoundPac’s imported cost of sales in dollar terms, meanwhile, is insignificant to the company,” said one of the analysts.
Analysts said FoundPac’s earnings growth would be supported by stronger demand and higher production capacity.
Chief executive officer Lee Chun Wah said FoundPac, which derived more than 95 per cent of its sales from export markets, aimed to strengthen its position in the United States to ride on the booming Silicon Valley in California.
“In Silicon Valley, there are a lot of small companies and design houses that we can be heavily involved with. As of now, we do not have any intention to come out from California,” he said after the company’s listing, here, yesterday.
FoundPac has earmarked RM4 million from the listing proceeds to establish sales offices in California, and Milan in Italy.
The US market contributed the highest share to the company’s revenue.
FoundPac is also pursuing growth in its customer base by diversifying into end-user industries while expanding its production capacity.
“We also plan to diversify our customer base to end-user industries in order to expand earnings stream as well as reduce the risk of depending on one particular industry,” said Lee.
FoundPac serves multinational semiconductor manufacturers for the telecommunication industry.