KUALA LUMPUR: Shares in RBD palm olein oil products supplier Sik Cheong Bhd ran up in price following the company's trading debut on the ACE Market of Bursa Malaysia.
The counter opened at 50 sen a share, an 85.15% or 23 sen increase over its 27 sen a share initial public offering (IPO) price.
At 9.22am, investor fervour in the share eased to a trading value of 45 sen a share, representing a 66.67% improvement over the reference price.
The company, raised RM17.8mil from its IPO, of which 40% will be used to set up a new packaging facility.
This will involve rebuilding the factory adjacent to its exiting facility, increasing its operational space by 88.1% to about 38,525 sq ft.
Additionally, the company will purchase new machinery and equipment for the repackaging of high oleic soybean oil and RBD palm olein oil products.
Sik Cheong also plans to extend its geographical reach beyond Kuala Lumpur and Selangor into neighbouring states such as Perak, Negeri Sembilan, Melaka and Pahang to capture a larger customer base.
This initiative will be supported by an expansion of its delivery trucks fleet, which will be funded by 5% or RM900,000 of the IPO proceeds.
Sik Cheong, via its subsidiaries, is principally involved in the repackaging, marketing and distribution of RBD palm olein oil products.
Managing director Wong Hing Ngiap said he believes the demand for RBD palm olein cooking oil products will continue to grow due to its essential role as a daily food ingredient.
"We see substantial market potential, as palm oil remains the most widely consumed vegetable oil in Malaysia, accounting for 76.7% of the total vegetable oil volume sold in 2023.
"In fact, the RBD palm olein oil repackaging industry in Malaysia is projected to grow at a compound annual growth rate (CAGR) of 20.9% to reach RM12.8bil in 2026," he said in a statement.
