Ecomate jumps 113.6% on ACE Market debut – The Edge Markets MY

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KUALA LUMPUR (Nov 8): Muar-based furniture specialist Ecomate Holdings Bhd made a strong debut on the ACE Market on Monday (Nov 8) and reached a high of 70.5 sen, notching a premium of 37.5 sen or an increase of 113.64% over its initial public offering (IPO) price of 33 sen.

At the opening bell, the stock opened 35 sen or 106.06% higher at 68 sen, giving it a market capitalisation of RM176.75 million. 

At 9.40am, the counter had pared some of its gains and traded 17.5 sen or 53.03% higher at 50.5 sen, with 58.18 million shares changing hands and it emerging as the top actively traded stock on the local bourse.

Ecomate aimed to raise RM16.2 million from its IPO exercise and intended to allocate the proceeds to acquire machinery and equipment (RM6 million), for the construction of its third factory to house three additional production lines and one block of a four-storey detached hostel (RM2 million) as well as purchase of raw materials (RM5.3 million).

It earmarked the remaining RM2.9 million to defray estimated listing expenses. 

“”Ecomate has recorded tremendous growth in its financial performance since its inception, with revenue and profit after tax and non-controlling interest (PATANCI) growing at astounding compound annual growth rates of 52.8% and 59.7% respectively from the financial year ended Feb 28, 2019 (FY19) to FY21.

“The revenue and PATANCI stood at RM56.3 million and RM8.5 million respectively for FY21,” according to Ecomate managing director Jason Koh Jian Hui in a statement on Oct 15.

Established in 2016, Ecomate is an export-oriented furniture producer based in Muar, Johor, focusing on the production of ready-to-assemble (RTA) furniture products where it undertakes its own design, development production as well as marketing and sales activities.

In a separate statement on Monday, Koh said he believes a robust business model and expansion pipeline put Ecomate in a strong position to capture more growth opportunities entailed in the furniture industry, especially the RTA segment.

He said the timely proceeds raised from the IPO would allow the company to implement its growth strategies expediently.

“Our immediate plan is to add a new production line in our Factory A to enhance our capacity, considering that we are operating at a near-full utilisation rate currently. We will also be constructing our new third factory, Factory C, which can house another three lines. Taken altogether, we will boost our capacity by 316,800 units or about 67% to 787,200 units per annum from the current output of 470,400 units per annum. Factory C is slated for completion by 2024.

“All in all, we are upbeat about future prospects for the furniture industry.

“Demand for furniture products is underpinned by several factors, such as the prevailing geopolitical tension between North America and China, which has routed many furniture orders to Southeast Asia. Coupled with e-commerce activities gaining a much stronger foothold recently as more consumers chose to shop online during the lockdown measures implemented worldwide, purchases of RTA furniture are expected to stay buoyant. We are poised to capitalise on growth of the industry and we look forward to the exciting new chapter ahead for Ecomate,” he said.

source: Ecomate jumps 113.6% on ACE Market debut – The Edge Markets MY

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