(From left): TMK Chemical Bhd non-independent non-executive director Lee Yan Ling, independent non-executive director Liew Li Ping, non-independent executive director and managing director Wong Kin Wah, independent non-executive chairman Johan Ariffin Rozali Wathooth, independent non-executive director Datin Paduka Kartini Abdul Manaf, non-independent executive director Leong Chao Seong, Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift, Malayan Banking Bhd (Maybank) global banking group chief executive officer Datuk John Chong, Maybank Investment Bank Bhd chief executive officer Michael Oh-Lau, Maybank Investment Bank Bhd deputy chief executive officer Tengku Ariff Azhar Tengku Mohamed and Bursa Malaysia director of origination and listing Leong See Meng.
KUALA LUMPUR: TMK Chemical Bhd, a producer and distributor of inorganic chemicals vital for the manufacturing sector, is set to leverage Malaysia’s industrial growth as the country continues to attract robust foreign direct investment (FDI).
Its non-independent executive director and deputy chairman Leong Chao Seong expressed optimism about the company’s prospects, driven by anticipated growth in the local manufacturing sector.
“We are optimistic about next year and the year after.
“Malaysia’s economy is recovering well. We have got a lot of FDI coming in,” he said.
Leong said that TMK Chemicals has observed that some of its potential clients are either building new factories or nearing completion of their facilities.
“So, for the next two years, we will see a very robust manufacturing sector in Malaysia,” he told a press conference at the group’s listing debut yesterday.
He noted that while geopolitical tensions, such as the United States-China trade conflict, create uncertainties, they also present potential opportunities.
“Owing to the China-plus-one strategy, many companies are coming to Malaysia to invest,” Leong said.
“You can look at our industrial land prices; they have gone up quite a lot, which means there is real demand.
“People are coming to buy our industrial land to build factories.”
However, Leong acknowledged that the economic benefits have yet to trickle down to consumers.
“Generally, consumers don’t feel it because it has not filtered down to higher salaries or more employment.
“But as an industrial player, we can feel it – land is getting more and more expensive. It is real,” he added.
Echoing this sentiment, TMK Chemical non-independent executive director and managing director Wong Kin Wah noted the high demand for industrial properties.
“In Batu Kawan, all the industrial lots are fully sold out and committed. Even in Kulim (industrial lands) are fully sold out.
“That is how robust the investment coming to Malaysia is,” Wong said.
TMK Chemical, which debuted on the Main Market yesterday at a 13% premium, is controlled by Datuk Lee Soon Hian, one of the Lee brothers behind Kuala Lumpur Kepong Bhd
.
The stock hit a high of RM2.03 and a low of RM1.89 in intraday trade before closing its maiden trading day 17 sen higher at RM1.92.
According to an independent market researcher Smith Zander International Sdn Bhd, TMK holds market shares of 24.91% in Malaysia, 23.98% in Singapore and 9.08% in Vietnam in the inorganic chemicals industry.
Inorganic chemicals are essential raw materials in a wide range of manufacturing and industrial processes, derived from non-living natural resources such as minerals, rocks and metal ores.
These raw materials are processed into various chemical products required across different industries.
TMK Chemical raised RM385mil from its initial public offering (IPO), aiming to expand production capacity and explore new market opportunities.
About RM90.2mil, or 23.4% of its IPO proceeds, will be invested in constructing a new manufacturing facility that will double the company’s annual production capacity to 352,254 tonnes of chlor-alkali derivatives by 2026.
Deputy general manager Leong Xiao Lung said the current plant is operating above the 74% capacity outlined in its prospectus.
An additional RM49.5mil, or 12.9%, will be used to establish a new processing facility in Singapore, as the existing facilities there are operating at full capacity.
TMK has allocated RM99.1mil, or 25.7%, for potential investments in the inorganic chemicals or related industries, though specific targets have yet to be identified.
On the potential acquisition, Leong said: “It will be within the inorganic chemical industry and in one of the three main countries we operate in – Malaysia, Singapore or Vietnam.
“It will align with our core business, with a priority to further vertically integrate our operations.
“Going outside of Malaysia, Singapore and Vietnam is not an easy task, but we will examine opportunities as they arise.”
Additionally, the group plans to use RM79.4mil, or 20.6%, of the IPO proceeds for working capital, and RM50mil, or 13%, to reduce borrowings.
This is expected to lower the gearing ratio from the current 1.5 times.
TMK Chemical’s listing marked the 50th IPO on the local bourse this year and the 11th listing on the Main Market in 2024.
Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar pointed out that this is the highest number of Main Market IPOs in a decade, with the last similar instance occurring in 2014, when 12 IPOs were listed.
Listed under the industrial products and services sector, TMK Chemical added to the RM30.8bil in market capitalisation generated by IPOs year-to-date, he said.
Looking ahead, Abdul Wahid expressed confidence in the exchange’s IPO pipeline, which includes 55 listings by year-end.
This would surpass the 32 listings achieved last year and exceed the initial target of 42 IPOs for 2024.
Earlier this week, TMK Chemical disclosed its first interim financial report, recording a topline of RM1.01bil and a net profit of RM89.03mil for the nine-month period ended Sept 30, 2024.
This translates into earnings per share of RM1.14.
