OFB got off to a good start on the first day and plans to expand the freezer

The company's initial public offering (IPO), issued 5.5 million new shares, and raised a total of RM1.41 million to raise working capital and expand its businesses, such as expanding the company's existing refrigeration facilities.

Of this, 57.09%, or RM8 million, will be used to expand the refrigerated storage facility in Kuantan, Pahang, increasing the stock from 1,700 tons to 4,700 tons.

The above inventory expansion will involve expanding the refrigerated space covering a total area of 3,747 square meters, including 6 refrigerating rooms, cargo handling areas, a lobby, and an office floor.

After the Malaysian Exchange this morning, the company described at a press conference that the freezer is a facility similar to a “weapon,” so it will only be invested in the refrigerated storage facility after raising more than half of the capital from the listing activities.

Ji Yuanchun, executive director and head of operations, said, “As a seafood processor, you can stock up on seafood supplies during periods when demand is high and prices are low; you can earn higher profits by leaving demand low and prices to rise again before selling.”

Furthermore, the company also aims to further develop overseas markets after the expansion of refrigerated storage facilities.

According to fiscal year 2023 revenue, frozen seafood retail revenue contributed 17.21% of the local share, followed by China (33.49%), Turkey (24.83%), and Japan (3.49%).

The ASEAN regional market, namely Vietnam (6.49%) and Thailand (3.56%), together contributed only 10.05% of revenue.

Non-independent non-executive chairman Liu Zhiqiang said, “Demand in the seafood market is very strong, such as the Chinese and Middle Eastern markets, so we want to use listing activities to get rid of the limitations of storage facilities in order to broaden the market size.”

Ji Huanchun added that the demand in neighboring markets in Southeast Asia is different from China or the Middle East, and will prefer lower sales prices and larger volumes, so refrigerated storage facilities once again highlight their importance.

With the expansion of frozen storage facilities, seafood supplies from fishermen and other channels have also become an essential consideration.

Liu Zhiqiang revealed that the company has defined parts of the East Malaysia coast, and it is not ruled out that after the expansion of the frozen storage facility is completed, it will import more seafood supplies from the local area.

“We started getting a fishing company to supply supplies in Kuda, Kota Kinabalu, Sabah 4 or 5 years ago. With the completion of the listing, we may soon reach out to more suppliers from East Malaysia.”

The company also plans to increase penetration in non-major markets, including the US, Denmark, etc.

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Ocean Frozen Food went strong on the first day. At one point, it soared 232% to the level of 93 cents!

It went public this morning. The opening price of the company was 85 cents, 28 cents over the initial public offering price, a premium of 203.57%. The initial transaction volume was 4.883,600 shares.

After the gong ringing ceremony, Executive Director Huang Xirong said at the press conference, “Of course, our company is very happy to be able to reap such a high premium.”

“We have actually been working in the market for a long time. I believe this shows that we have a certain foundation in the market.”

Despite the sharp rise, the stock has more than doubled since closing today.

In this initial public offering, KAF Investment Bank acted as the chief advisor, sponsor, underwriter, and placement manager.

Attending the gong ceremony were also Damando, the majority shareholder of Frozen Ocean Foods, Chen Rongan, executive director Zhang Zhibing, and non-independent non-executive director Xie Huifu.

Meanwhile, KAF Investment Bank CEO Luo Haicha and Corporate Finance Director Ye Jinfa also attended the ceremony.