PETALING JAYA: Sik Cheong Bhd, a company specialising in repackaging, marketing and distribution of refined, bleached and deodorised (RBD) palm olein oil, has attracted significant investor interest for its initial public offering (IPO).
The IPO was oversubscribed by 213.53 times ahead of its listing on Bursa Malaysia’s ACE Market. The oversubscription rate ranks as the highest among all IPO issues in the past 10 years, based on information extracted from the Bursa Malaysia website.
Managing director Wong Hing Ngiap said the strong response to its IPO reaffirms the company’s strategic direction and reinforces its commitment to creating value for shareholders as it continues to pursue growth opportunities in the distribution of essential food.
“Our growth strategy involves expanding our product range to include high oleic soybean oil, where we have received enquiries from food manufacturers and hotel operators. Leveraging our experience and existing customer base in offering RBD palm olein oil products, we believe we have a solid foundation to secure new orders and cross-sell this new product,” he said in a statement.
Wong said Sik Cheong recognises the potential for high-oleic soybean oil, which is supported by its affordability, wide availability, and the growing food and beverage industry in Malaysia. This makes it a strategic addition to our product portfolio, suitable for households, hotel, restaurant and catering operators and food manufacturers.”
Sik Cheong’s primary revenue source is its RBD palm olein cooking oil products, which are sold under its house brands, “Sawit Emas” and “Vitamas”. The group also sells RBD palm olein lamp oil under the “Pingat Emas” brand and trades third-party products, primarily margarine.
The group plans to extend its reach beyond its current strongholds of Kuala Lumpur and Selangor. It aims to capture a larger customer base and continue its growth trajectory by expanding into Perak, Negeri Sembilan, Malacca and Pahang.
Sik Cheong’s IPO entails an issuance of 66 million shares, which will make up 24.8% of its expanded share capital. Additionally, 20 million shares, or 7.5% of the enlarged share capital, will be offered through private placement to selected investors.
The IPO has received applications from 26,395 investors for a total of 2.85 million shares worth about RM770.37 million. This is for the 13.3 million shares allocated to the Malaysian public, resulting in an oversubscription rate of 213.53 times.
For the Bumiputera portion, 14,953 applications for 1.3 billion shares were received, representing an overall oversubscription rate of 195.40 times.
As for the public portion, 11,442 applications for 1.54 billion shares were received, resulting in an oversubscription rate of 231.65 times.
The four million shares set aside for eligible directors, employees, and individuals who have contributed to the company’s success have also been fully subscribed.
Meanwhile, the private placement of 48.7 million shares and 20 million offer shares made available via private placement to selected investors have been fully placed out.
Notices of allotment will be sent to successful applicants on Friday.
Sik Cheong is scheduled to be listed on the ACE Market on Aug 13. With an IPO price of 27 sen per share and an enlarged issued share capital of 266 million shares, the group’s market capitalisation upon listing is estimated to be RM71.8 million.
TA Securities Holdings Bhd is the principal adviser, sponsor, sole underwriter and placement agent for Sik Cheong’s IPO.
