RBD palm olein oil repackaging, marketing and distribution company, Sik Cheong Berhad (“Sik Cheong”), has garnered strong interest from investors for its initial public offering (“IPO”) exercise, which has been oversubscribed by 213.53 times ahead of its listing on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). Based on information extracted from Bursa Securities’ website, this oversubscription rate ranks as the highest among all IPO issues in the past ten years.
Sik Cheong, through its subsidiaries (collectively, the “Group”), is primarily engaged in the repackaging, marketing and distribution of RBD palm olein oil products, which is a refined, bleached and deodorised liquid palm oil. The Group’s primary revenue contributor comes from its RBD palm olein oil cooking oil products, sold under its house brands of “Sawit Emas” and “Vitamas”. The Group also sells RBD palm olein lamp oil under “Pingat Emas” brand, as well as trades third-party products, primarily margarine, upon customer requests.
Sik Cheong’s IPO exercise involves a public issuance of 66,000,000 new ordinary shares (“Shares”), representing 24.8% of its enlarged share capital, and an offer for sale of 20,000,000 existing shares, or 7.5% of its enlarged share capital by way of private placement to selected investors.
Sik Cheong has received a total of 26,395 applicants for 2,853,204,800 Shares with a value of approximately RM770.37 million for the 13,300,000 Shares allocated to the Malaysian public, representing an overall oversubscription rate of 213.53 times. For the Bumiputera portion, 14,953 applications for 1,306,082,200 shares were received, representing an overall oversubscription rate of 195.40 times.
As for the public portion, 11,442 applications for 1,547,122,600 shares were received, resulting in an oversubscription rate of 231.65 times.
The 4,000,000 Shares available for application by the eligible Directors, employees and persons who have contributed to the success of the Company have been fully subscribed.
Meanwhile, the private placement of 48,700,000 Shares and 20,000,000 offer shares made available via private placement to selected investors have also been fully placed out.
Notices of allotment will be dispatched to all successful applicants on 9 August 2024.
Managing Director of Sik Cheong, Mr. Wong Hing Ngiap said, “We are truly grateful for such strong response to our IPO. This reaffirms our strategic direction and reinforces our commitment to creating value for our shareholders as we continue 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 been receiving 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. Sik Cheong recognises the potential of high oleic soybean oil, 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, hotels, restaurant and catering operators, and food manufacturers.”
With Sik Cheong’s RBD palm olein oil products well-received and widely available, the Group also plans to extend its reach beyond its current strongholds of Kuala Lumpur and Selangor. Sik Cheong aims to capture a larger customer base and continue its growth trajectory by expanding into neighbouring states such as Perak, Negeri Sembilan, Melaka, and Pahang.
Sik Cheong is scheduled to be listed on the ACE Market of Bursa Securities on 13 August 2024. With an IPO price of 27 sen per Share and an enlarged issued share capital of 266.0 million shares, the Group’s market capitalisation upon listing is estimated to be approximately RM71.8 million.
TA Securities Holdings Berhad is the Principal Adviser, Sponsor, sole Underwriter and Placement Agent for the IPO Exercise.
