Ocean Fresh Berhad (OFB) made a strong debut on the ACE Market of Bursa Malaysia on Thursday as its share price shot up opening at 85 sen, versus its initial public offering (IPO) price of 28 sen with trading doubling.
OFB raised RM14.01 million through its initial public offering (IPO).
At 9.15am, the stock opened at 85 sen and climbed to 93 sen before settling back to 85.5 sen. Almost an hour later, the stock tapered to 84 sen rising 200% above its listing price with a trading volume of 82 299 900 shares traded.
Earlier, it was reported that OFB received substantive response for its public allotment of its IPO shares with it being oversubscribed by 76.22 times.
According to the prospectus, with the IPO proceeds, the company intend to set up a new cold storage facility, to expand storage space.
"At present, we store our frozen seafood supplies and products in our cold rooms at our headquarters and processing facility. We have reached a utilisation rate of up to 99.94%.
"In order to cater to the growth of our business, we intend to set up a new cold storage facility, which will have a total of six units of new cold rooms and a loading bay," it said.
The new storage facility is expected to have a total aggregate built-up area of 3,747 m2, with a total storage capacity of 3,000 tonnes, it said.
Ocean Fresh is principally involved in the processing and trading of frozen seafood products.
It also said that it intends to use the IPO proceeds to finance its working capital, including exports of frozen seafood products to international markets, particularly China.
"We have exported our products to Turkey and countries mainly in the Asia Pacific such as China, Thailand, Vietnam, Japan Indonesia, Philippines, Singapore and Korea.
"These markets present a pool of opportunities for us to expand our geographical presence in light of positive market prospects as set out in IMR report, which said the average seafood consumption in the Asia Pacific was the highest in the world at 23.5 kg per capita," it said.
It added that it wants use the proceeds to venture into the processing and trading of dried seafood products.
Ocean Fresh has reported a steady increase in net profit, recording a net profit of RM5.58 million for the financial year 2022 (FY2022), up from a net profit of RM4.02 million for FY2021 and RM2.4 million in FY2020.
KAF Investment Bank Bhd is the principal adviser, sponsor, underwriter, and placement agent for the IPO.