Furniweb makes strong debut on Hong Kong stock exchange

HONG KONG: PRG Holdings Bhd’s 75%owned manufacturing arm Furniweb Holdings Ltd made a strong debut on the Hong Kong stock exchange yesterday, opening at HK$0.60, a HK$0.10 or 20% premium over its initial public offering (IPO) price of HK$0.50.

At the close of trading, Furniweb shares were HK$0.14 or 28% higher at HK$0.64 (RM0.35) on 131.49 million shares done.

Furniweb is involved in manufacturing of elastic textiles, comprising covered elastic yarn and narrow elastic fabricwebbing, furniture and seat belt webbing other products, including rubber tape.

Based on the offer price of HK$0.50 per share for a total of 126 million new shares, Furniweb raised a total of HK$63 million (RM34 million) from the IPO.

A total of HK$35.6 million from the net proceeds will be reinvested for the operations of Furniweb. Of this, HK$32.4 million has been allocated for the expansion of the production capacity for its products, namely narrow elastic fabric, covered elastic yarn and seat belt webbing, which will be undertaken at the new factory in Vietnam that is under construction.

Speaking to reporters after the listing ceremony, Furniweb chairman Datuk Michael Lim said the group, which is on the Growth Enterprise Market (GEM), is looking for a transfer to the main board in the future.

“We will make a natural and strategic progression towards it,” Lim said.

GEM is an alternative market catering mainly to higher risk firms such as start-ups and operates in parallel to the main board.

Lim said listing on a “global capital market” such as Hong Kong gives it a recognition and puts the group in a good position to expand its operations, while giving it access to global investors.

Commenting on the volatility of stocks on GEM, Lim said he does not foresee it as a problem as long as the group complies with the market’s rules and regulations.

“Yes there is volatility. If we conduct ourselves in a proper manner, by following the rules, I think we should be okay.”

On expansion plans, Furniweb, which exports to 30 countries currently, sees China as one of its target markets.