Muar-based ready-to-assemble (RTA) furniture specialist, Ecomate Holdings Bhd has successfully debuted on the ACE Market of Bursa Malaysia Securities Bhd today. The stock is categorised under the Consumer Products and Services sector, carrying the stock code of 0239.
Ecomate opened at RM0.68, representing a premium of RM0.35 or 106.1% from its issue price of RM0.33 per share. The opening volume was 10.6 million shares.
The ready-to-assemble (RTA) furniture specialist raised a total of RM16.17 million from the public issue under its initial public offering (IPO), of which RM6.00 million or 37.1% will be used to acquire new machinery and equipment. RM2.00 million or 12.4% will be allocated to finance its new factory and hostel construction. Meanwhile, RM5.27 million or 32.6% will be allocated for the purchase of raw material, and the balance RM2.90 million or 17.9% is earmarked for listing expenses.
“We are very delighted with the strong opening performance of our stock. This demonstrates the confidence that investors have in our business model and future prospects. As we begin our journey today as a public-listed entity, we will certainly continue to deliver value to all our stakeholders. Now, with the proceeds raised from the listing exercise, we are excited to embark on our next phase of growth,” says Managing Director of Ecomate, Jason Koh Jian Hui.
“We believe our robust business model and expansion pipeline put us in a strong position to capture more growth opportunities entailed in the furniture industry, especially the RTA segment. Indeed, the proceeds raised from this IPO is timely as it allows us to implement our growth strategies expediently. Our immediate plan is to add a new production line in our Factory A to enhance our capacity considering we are operating at 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.”
Jason says he is upbeat on the future prospect of the furniture industry. The 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 South-East Asia.
“Coupled with the e-commerce activities gaining a much stronger foothold recently as more consumers choose to shop online during the lockdown measures implemented worldwide, purchases of RTA furniture are expected to stay buoyant. We are poised to capitalise on the growth of the industry and we look forward to the exciting new chapter ahead for Ecomate,” Jason adds.
Meanwhile, commenting on Ecomate’s latest second-quarter results for the financial period ended August 2021, Jason says, “We recorded a net loss of RM1.8 million on revenue of RM6.5 million. The loss was expected given the operational halt that hit the entire furniture industry during the Full Movement Control Order, which spanned across our reporting period of between 1 June and 31 August 2021. Additionally, we also incurred listing expenses of RM0.7 million during the quarter under review.”
For the IPO exercise, M&A Securities Sdn Bhd is the Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
