MKH Oil Palm (East Kalimantan) Bhd (MKHOP) opened at 63 sen in its debut on the Main Market of Bursa Malaysia Securities today (Apr 30) up 1.6% from its initial public offering (IPO) price of 62 sen. The counter saw some 12.13 million shares traded.
At 9.30am, the counter reached a high of 0.655 sen to taper down to 0.635 sen with a total volume of 74 052 400 shares traded.
Non-Independent Non-Executive Chairman of MKHOP, Tan Sri Dato’ Chen Kooi Chiew @ Cheng Ngi Chong said, “We embark on a new chapter today as a listed entity. This pivotal moment marks a significant step in our corporate journey as we remain committed in executing our strategic initiatives for long-term growth.”
“With the RM136.4 million of fresh capital raised through IPO, we intend to expand our plantation estates by acquiring new land near our existing plantation estates. Our focus will also be on enhancing operational efficiency, increasing processing capacities, and diversifying product offerings through new machinery and equipment, as well as establishing a new palm kernel (PK) crushing facility.”
“In addition, as part of our continuous initiative to improve the living conditions of our workforce and their families, we will construct new staff quarters and upgrade existing ones. We will also expand coverage of electricity supply at our plantation estates, reducing our reliance on diesel generators. This will not only reduce our diesel fuel costs but also aligns with our commitment to environmental sustainability.”
“Due to the on-going El Nino dry weather, this will lead to tighter global CPO supply, which is expected to support CPO prices. This presents a favourable outlook for us as we focus on improving production efficiency to enhance oil extraction rates to capitalise on the higher CPO prices. As we progress, we are confident in the long-term growth prospects of the oil palm industry, driven by the upward trajectory of global population and escalating demand for edible oils and fats worldwide.”
“With our expansion strategy firmly in place, we are well-positioned to leverage the rising consumption of Crude Palm Oil (CPO) in Indonesia, the largest consumer market for CPO globally,” he concluded.
Meanwhile, MKHOP’s financial performance for the first six months ended 31 March 2024 (1HFY2024) remained strong. The Group achieved a net profit of RM26.5 million on the back of RM168.4 million in revenue. Additionally, the Group maintained a healthy cash and bank balances of RM89.6 million as of 31 March 2024.
Earlier, MKH Oil Palm (East Kalimantan) Bhd’s initial public offering (IPO) was oversubscribed by 8.43 times ahead of its listing. MKH Oil received a total of 9,510 applications for 482.9 million shares worth RM299.4 million for the 51.2 million shares allocated to the public, representing an oversubscription rate of 8.4 times.
MKH Oil chairman Tan Sri Chen Kooi Chiew had said with the IPO funds, the company is well-equipped to pursue its expansion strategy, which includes acquiring new land in the vicinity of its existing plantation estates to expand its plantation landbank.
“Furthermore, our efforts will be directed towards enhancing our operational efficiency and increasing our processing capabilities and product offerings, supported by investments in new machinery and equipment.
“A key initiative includes the new palm kernel (PK) crushing facility to crush and press PK for extraction and processing into crude palm kernel oil and palm kernel expeller, thereby diversifying our revenue streams,” he said in a statement then.
M&A Securities Sdn Bhd is the adviser, managing underwriter, joint underwriter and joint placement agent for the IPO exercise.
Kenanga Investment Bank Bhd is the joint underwriter and joint placement agent, while AmInvestment Bank Bhd is the joint placement agent for the IPO.
