IPO: Sin-Kung Sees No Movement To 13 Sen Share Price On Debut (Updated)

Sin-Kung Logistics Bhd made a flat debut on the ACE Market of Bursa Malaysia at 13 sen today (May 15).

Its muted debut saw a volume of 26.36 million shares traded. The counter then climbed to a high of 13.5 sen after 98 million shares changed hands.

The Company, which is principally involved in the provision of trucking services with a focus on airport-to-airport road feeder services, expects the demand for its trucking services to increase in tandem with a sharp rise in demand for air cargo attributable to the increasing importance of air cargo as a less volatile alternative to traditional shipping routes, offering faster and more reliable service. 

Alan Ong,  Managing Director of Sin-Kung Logistics, said the rapid rise of e-commerce post COVID-19, disruption in ocean shipping and supply chain diversification are some of the main drivers of air cargo demand in the current market.

“The Red Sea crisis and e-commerce boom have somehow benefitted Sin-Kung Logistics as we are currently serving about 50 airlines across Peninsular Malaysia, and Singapore.

“The Company is well-positioned to secure more jobs as our airport-to-airport road feeder services covering extensive network of airports across Peninsular Malaysia, Singapore and Thailand,” he added.

Sin-Kung Logistics owns and operates 461 commercial vehicles for the provision of its trucking, container haulage, warehousing and distribution as well as other logistics-related businesses. 

In 2023, Sin-Kung Logistics generated RM52.0 million in revenue, of which 72.3% came from trucking services, 9.5% from container haulage services, 15.7% from warehousing and distribution services, and 2.5% from other logistics-related services.   

The Company had just successfully raised RM26.0 million in its IPO exercise, to part fund the expansion of fleet of commercial vehicles and expansion of its warehousing and distribution business.

Of the proceeds, RM2.0 million will be used to purchase 100 commercial vehicles by 2025, as part of its strategy to further expand its trucking and container haulage businesses.

Sin-Kung Logistics also plans to utilise RM10.0 million to fund its warehousing and distribution services’ expansion to meet the future rising demand from manufacturing and e-commerce sectors. 

A sum of RM9.6 million will be used to repay bank borrowings followed by RM1.1 million for working capital and the remainder RM3.3 million for its estimated listing expenses.

Based on the enlarged share capital of 1.2 billion shares, Sin-Kung Logistics will have a market capitalisation of RM156.0 million after listing. 

As at 20 March 2024, Sin-Kung Logistics operates five warehouses, located in Shah Alam and Port Klang, Selangor, Bukit Mertajam, Butterworth and Bukit Minyak, Penang with an aggregate annual capacity of approximately 190,260 pallets.

Earlier, it was reported that Sin-Kung Logistics Berhad’s saw its initial public offering for the public portion being oversubscribed by 26.5 times, accordingly a total of 13,179 applications seeking 1.7 billion new shares were received for 60.0 million new shares that were made available for public subscription. 

M & A Securities Sdn Bhd is the Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.

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