Sheet metal products manufacturer and scaffoldings supplier, BWYS Group Berhad (BWYS) IPO opened at 32 sen, representing a premium of 45.5% over the issue price of 22 sen, with an opening volume of 33,921,300 shares on the Ace Market Of Bursa Securities today.
The stock is categorised under Industrial Products & Services.
This robust debut follows an initial public offering (IPO) oversubscription of 48.5 times, reflecting strong confidence in BWYS's business operations and growth potential.
BWYS Managing Director Kang Beng Hai said: "This significant milestone is a testament to our 25 years of expertise navigating the complexities in the sheet metal product industry, from managing a vast global supplier network and streamlining procurement, to meticulous steel price monitoring, efficient inventory management, and optimised logistics planning. Now, armed with fresh capital, we are poised to accelerate our growth and seize new opportunities."
He added, in 2023, BWYS achieved an 11% market share in the Malaysian metal roofing sheets and trusses market. "To build on this success, we are expanding our production capacity with a new 197,153 sq ft factory in Penang. This strategic expansion will not only resolve existing space constraints but also enable us to introduce a new continuous production line for polyurethane ("PU") foam sandwich panels, a product known for its superior heat and noise insulation properties. Additionally, our warehouse capacity will increase by over 11 times from 13,183 sq ft to 150,231 sq ft, ensuring we are well-equipped to meet the growing demand for our diverse range of products."
The company is also investing in state-of-the-art machinery and equipment to further enhance their manufacturing capabilities for roof trusses and industrial racking systems. The planned implementation of information and communications technology (ICT) systems will further streamline our production and inventory management processes as well, he said.
BWYS's revenue grew from RM130.9 million in the financial year ended 31 December 2020 (FYE 2020) to RM246.1 million in the financial year ended 31 December 2023 (FYE 2023), achieving a 3-year compound annual growth rate (CAGR) of 23.4%. Meanwhile, profit after tax (net profit) also grew from RM3.4 million in FYE 2020 to RM17.6 million in FYE 2023, representing a 3-year CAGR of 73.0%.
For the FYE 2023, 95.6% of BWYS's revenue was generated domestically, with the remainder coming from the United States and other countries, including Singapore, Indonesia, Australia, Bangladesh, the Philippines, United Arab Emirates, Brunei, and Kuwait.
As part of its business strategies, BWYS plans to expand its presence in both existing and new markets by leveraging its resellers networks, thereby mitigating the need for substantial investments in resources and facilities abroad.
Kang added BWYS is poised to capitalise on the growth opportunities in the Malaysian steel industry. The Malaysian Iron and Steel Industry Federation (MISIF) anticipates domestic steel consumption to reach between 8.3 million and 9.0 million tonnes this year, a notable increase from 7.9 million tonnes in 2023.
The growth is mainly attributable to burgeoning investments in data centres and the expanding semiconductor industry, as well as ongoing large-scale infrastructure projects such as the Mass Rapid Transit 3 (MRT3), Penang Light Rail Transit (LRT), and Johor Baru-Singapore Rapid Transit System (RTS) Link.
"Moving forward, we will continuously expand our production capacity, enhance our manufacturing capabilities, and diversify our product offerings to align with the dynamic market needs. Our aim is to strengthen market presence and deliver sustainable value to our shareholders," he said.
BWYS has raised a total of RM56.4 million from its IPO. A significant portion of the proceeds, RM41.4 million (73.3%), will be invested in the Company's capital expenditure, including the construction of the New Penang Factory, the acquisition of new machinery and equipment, and the implementation of a new enterprise resource planning (ERP) system. Additionally, RM5.5 million (9.8%) will be allocated to working capital, with an equal amount set aside for listing expenses. The remaining RM4.0 million (7.1%) will be used to repay bank borrowings.
M & A Securities Sdn Bhd is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.