MTAG enters next stage of growth with Ace Market debut
KUALA LUMPUR: The Ace Market listing of MTAG Group Bhd signals the next stage of growth for the printing and materials converting specialist.
The Johor-based company raised Rm72.3mil in its initial public offering (IPO) through the issuance of 136.3 million new shares, each priced at 53 sen.
The listing exercise also saw the private placement of 68.16 million existing shares from its shareholders to selected investors.
Although it started off strongly, opening at a 32% premium at 17 sen above its offer price, current market sentiment saw the share price fall to a 43.5 sen low during the trading session, closing at nine sen below its IPO price at 44 sen.
Nearly half of the proceeds from the IPO, amounting Rm33mil, will be used to implement its growth strategies, most notably to acquire 10acre in Senai or Tebrau to construct its new manufacturing plant.
A total of Rm13mil is earmarked for capital expenditure, while the remaining funds will be used for working capital, repaying bank borrowings and defraying listing expenses.
MTAG is looking at a three-year timeline for the construction of its new factory, which is set to house its corporate office, production lines and warehouse.
It has acquired two new machines for that purpose and would be purchasing 11 more, including a digital offset printer, to meet the needs of its customers.
This will almost double its current annual production capacity for labels and stickers from 324.5 million pieces to 636.8 million pieces.
“The plans we have in place allow us to accommodate the demands of our existing customers and command a larger slice of market share in the label printing and converting industry,” said MTAG group managing director Chaw Kam Shiang.
In a press conference after the listing ceremony, MTAG executive director Philip Lau Cher Liang said the group has seen steady growth over the past few years and believed that it could sustain its performance.
For the financial years between 2016 and 2019 ending June 30, revenue contribution from its five major customers contributed a total of 71.3%, 76.8%, 71.1% and 71.1% respectively to its total revenue. Four of the five customers are Dyson-linked suppliers.
The plans we have in place allow us to accommodate the demands of our existing customers.
Chaw Kam Shiang