KUALA LUMPUR: Sik Cheong Berhad (“Sik Cheong”) —a repackaging, marketing, and distribution company for RBD palm olein oil—has successfully debuted on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The stock is listed under the consumer products and services sector, with the stock name SCB and stock code 0316.
At the opening bell, Sik Cheong’s share price opened at 50 sen, representing a premium of 85.2% over the issue price of 27 sen.
Mr. Wong Hing Ngiap, Managing Director of Sik Cheong, commented:
“We are truly grateful for the market’s confidence as Sik Cheong begins a new journey as a publicly listed company. This significant milestone underscores over three decades of our expertise in the RBD palm olein oil repackaging industry, from monitoring crude palm oil prices to efficient procurement, inventory management, and logistics planning. With the fresh capital raised, we are now poised to embark on our next phase of expansion.”
The Malaysian RBD palm olein repackaging industry is projected to grow with a strong compound annual growth rate (“CAGR”) of 20.9%, reaching RM12.8 billion by 2026. This growth is driven by continuous consumer demand, as well as increasing demand from hotel, restaurant, and catering operators. While palm olein oil is the most produced vegetable oil in the country, soybean oil ranks third, indicating substantial market potential. In response to this, Sik Cheong plans to expand its product range to include high oleic soybean oil, providing a cost-effective option suitable for most cooking methods.
This strategic expansion will be facilitated by the construction of a new packaging facility through the rebuilding of Factory No. 9, located next to the Group’s existing Factory No. 11. The expansion will increase Sik Cheong’s total operational space by 88.1%, effectively addressing space limitations for repackaging and storing RBD palm olein oil products. Additionally, the Group plans to purchase new machinery and equipment for the repackaging of high oleic soybean oil and RBD palm olein oil products.
To drive sales growth, Sik Cheong aims to expand its geographical reach into other states, including Perak, Negeri Sembilan, Melaka, and Pahang. With these states’ proximity to Kuala Lumpur and Selangor, where Factory No. 11 is located, the Group can efficiently extend its sales and distribution capabilities. The Group will also increase its fleet of delivery trucks to ensure timely and reliable deliveries—critical for maintaining customer confidence as edible oil is an essential ingredient for food preparation.
To recap, Sik Cheong has raised a total of RM17.8 million from the IPO. Of this amount:
– RM7.2 million (40.3%) is allocated for the expansion of the packaging facility, including the rebuilding of Factory No. 9 and the purchase of new machinery and equipment.
– RM0.9 million (5.0%) is set aside for the purchase of new delivery trucks.
– RM6.0 million (33.4%) is designated for working capital.
– The remaining RM3.8 million (21.3%) will cover listing expenses.
TA Securities Holdings Berhad is the Principal Adviser, Sponsor, sole Underwriter, and Placement Agent for the IPO exercise.
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