IPO Details
Pantech Global Berhad is undertaking an Initial Public Offering (IPO) to raise approximately RM178.32 million through the issuance of 262,228,000 new ordinary shares at RM0.68 per share. The primary purposes for raising these funds are:​
The IPO involves the issuance of 262,228,000 new shares at RM0.68 each, totaling approximately RM178.32 million. Post-listing, the company’s enlarged issued share capital will be 850,000,000 shares, resulting in a market capitalization of RM578 million. ​
The IPO’s structure includes a private placement of 69.98 million shares to selected investors and 106.25 million shares to approved Bumiputera investors, all of which have been fully subscribed. ​
The public portion of the IPO, comprising 21.25 million shares, has been oversubscribed by 44.93 times, indicating strong retail investor interest. ​
Timing of IPO: The IPO is scheduled for March 3, 2025. ​
Given the substantial oversubscription rate and the company’s strong market position, the IPO is anticipated to perform well on its first day of listing.​
Alliance Islamic Bank Berhad serves as the principal adviser, underwriter, and placement agent for Pantech Global’s IPO. ​
Alliance Islamic Bank’s involvement, coupled with the strong oversubscription rate, suggests a positive performance on the first day of listing.​
Analyst reports suggest a positive outlook for Pantech Global. For instance, Mercury Securities recommends subscribing to the IPO with a target price of RM0.82, representing a potential upside of 20.6% from the IPO price. ​
Listing details:
Business Expansion and Capital Expenditure: 74% of the proceeds (approximately RM132 million) are allocated for expansion projects, including the construction of a new factory and corporate head office in Selangor, a warehouse in Johor to improve order fulfillment, and a pickling facility for longer pipes. ​
Working Capital: 13% (approximately RM22.72 million) is designated for working capital needs.​
Loan Repayment: 8% (approximately RM15 million) will be used to repay bank borrowings.​
Listing Expenses: The remaining funds are set aside to cover estimated listing expenses.​
The IPO has garnered significant interest, with the public portion oversubscribed by 44.93 times, receiving 20,240 applications for 975.93 million new shares. ​
Company Overview
Business Model and Industry: Pantech Global is a leading manufacturer of butt weld pipe fittings and welded pipes, serving industries such as petroleum, water, chemicals, food and beverage, shipbuilding, pharmaceuticals, power generation, and semiconductors. The company operates in Malaysia and exports to 27 foreign markets. ​
The company reported revenue of RM440.94 million and a profit after tax of RM49.71 million for the financial year ended 2024. ​
Pantech Global holds a 66% share of Malaysia’s export market for butt-weld pipe fittings and supplies 16% of the country’s stainless-steel welded pipes. ​
The management team includes Managing Director Adrian Tan, who has been instrumental in driving the company’s strategic direction and global expansion. ​
The demand for high-performance piping solutions is expected to remain strong, driven by growth in industries such as oil and gas, petrochemicals, and infrastructure development.​
The Malaysian economy has been showing signs of recovery, with key sectors rebounding, which bodes well for industrial manufacturers like Pantech Global.​
Recent reports indicate that Pantech Global’s IPO has attracted substantial retail interest, with the public portion oversubscribed by 44.93 times. ​
Overall, the favorable market conditions and strong demand for the company’s products suggest a positive outlook for the IPO.​
Pantech Global’s market capitalization of RM578 million and a P/E ratio of 12 times its trailing earnings position it competitively within the industry.
Given these positive indicators and the substantial oversubscription rate of 44.93 times for the public portion, it is reasonable to anticipate that Pantech Global’s share price will trade above the IPO price on the first day of listing. While precise price movements are subject to market conditions, an initial trading range between RM0.80 and RM0.90 seems plausible, aligning with analyst valuations and investor interest.
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