PETALING JAYA: Techbond Group Bhd, a developer and manufacturer of industrial adhesives and sealants, ended its debut on the Main Market of Bursa Malaysia Securities today 30% or 20 sen higher at 86 sen, giving it a market capitalisation of RM197.8 million.
“Today’s listing signals the beginning of a new phase in our corporate journey. As demonstrated from the public portion of our shares which was oversubscribed by 24.20 times, this strong interest from the members of the public will give us motivation to strive for better achievements and higher shareholders’ value in the coming years. We have developed a clear roadmap and set realistic targets which we are hopeful of achieving,” Techbond managing director Lee Seng Thye said at its listing ceremony.
The company’s initial public offering (IPO) entailed a public issue of 60.11 million new ordinary shares at an issue price of 66 sen per share.
Techbond is working to strengthen its reach in its existing markets, such as Vietnam, Malaysia, Indonesia and other countries, and to continuously develop and expand its product range of industrial adhesives and sealants. This is expected to provide sustainability and growth opportunities to the company in the years to come.
The IPO proceeds of about RM39.67 million will be used for, among others, the construction of a factory complex at the Vietnam-Singapore Industrial Park 2 in Binh Duong Province, Vietnam (VSIP2). They will also go to the purchase of machinery and equipment for VSIP2 and its existing factory complexes in Shah Alam.
Techbond began operations in 1996 in Malaysia and expanded to Vietnam in 2005. Over the years, Techbond expanded its presence to countries such as Indonesia, China, Thailand, Cambodia, Brunei, Liberia, Singapore, Sri Lanka, the Maldives, China (Hong Kong) and Uganda.
In conjunction with the listing, Rakuten Trade initiated coverage on Techbond with a “buy” call and a target price of 95 sen. Its target price is based on 15x price-to-earnings ratio of the Bursa Malaysia Industrial Production Index.
The valuation is premised on Techbond’s 22-year track record as a manufacturer of industrial adhesives and sealants with a strong presence in Asean; the fact that about 73% of the IPO proceeds will go to the second factory complex in Vietnam, to be completed by March 2020; that 14.9% of the proceeds for its Malaysian operations to add four production lines as well as the development of new adhesives types; and its commendable net margin of around 15%, with net profit growing steadily at a 12.3% compound annual growth rate for the past four years.
Rakuten Trade said it expects Techbond’s earnings per share to grow by 8% and 26% respectively in FY19 and FY20.
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KUALA LUMPUR: Cashless payment solutions provider Revenue Group Bhd plans to make its maiden foray into the overseas market within the first quarter of next year, via its partnership with a multinational company in Myanmar.
“Right now we are waiting for feedback from the authority. We expect to get their approval in first quarter of 2019,” the group’s managing director and group CEO Eddie Ng Chee Siong told reporters after its AGM and EGM today.
“If there is any good opportunity in other Asean countries such as Thailand and Indonesia, we will also consider (venturing into these countries),” Ng added.
Previously, the group said it allocated RM1.5 million from its initial public offering (IPO) proceeds for expansion into Myanmar and Cambodia, citing early stage development in the e-payment systems there.
In total, the ACE Market-listed company raised RM20.6 million from its IPO exercise, in which the bulk of the proceeds will be used to buy 9,000 units of new electronic data capture (EDC) terminals with the capability of accepting Quick Response payment.
However, Ng noted that there is no new development on its expansion plans into Cambodia at the moment.
He said the group’s businesses are concentrated in Malaysia and a majority of the group’s revenue is derived locally.
On its financial performance for financial year ended June 30, 2019 (FY19), Ng said the group is optimistic on its outlook as it aims to execute all of its existing contracts and expects more merchants to embrace cashless payment going forward.
Additionally, he said the group’s recent partnership with Public Bank Bhd to launch an all-in-one digital payment terminal is expected to be one of the main drivers to the group’s double-digit revenue growth target for FY19.
“Currently, we are also working with Hong Leong Bank on a similar contract we concluded with Public Bank. Hopefully, we can roll out the machines by end of this year.
“Because the more terminals we deploy, the more transactions it will gain and the more recurring income (we will get) from the banks’ site,” Ng added, noting it has sold 5,000 units of EDC terminals to Hong Leong Bank previously.
The group’s revenue grew 33% to RM35.36 million in FY18, compared with RM26.5 million in FY17 mainly due to higher revenue recognised from its three core business segments.
Its three business segments include the distribution, deployment, and maintenance of EDC terminals, electronic transaction processing services for credit and debit cards as well as solutions and services related to payment infrastructure.
The group serves more than 10 financial institutions. Its clients include physical and online store merchants.
KUALA LUMPUR: Cashless payment solutions provider Revenue Group Bhd plans to make its maiden foray into the overseas market within the first quarter of next year through its partnership with a multinational company in Myanmar.
“Right now we are waiting for the feedback from the authority. We expect to get their approval in first quarter of 2019,”
the group’s managing director and group CEO Eddie Ng Chee Siong (pix) told reporters after its AGM and EGM here today.
Previously, the group said it has allocated RM1.5 million from its initial public offering (IPO) proceeds for its expansion into Myanmar and Cambodia, citing the e-payments system in these countries were still at the infancy stage.
“If there is any good opportunity in other countries such as Thailand and Indonesia, we will also consider (venturing into these countries),” Ng added.
PETALING JAYA: Hong Leong Bank Bhd’s net profit for the first quarter ended Sept 30 rose 10.63% to RM706.92 million from RM638.97 million a year ago, driven by growth in non-interest income, prudent cost control and lower impairment allowances.
During the quarter, non-interest income surged 35.4% year-on-year to RM397 million to a higher non-interest income ratio of 31.8%, as a result of improved performance in treasury market activities and gain on divestment of joint venture.
Revenue for the quarter rose 5.97% to RM1.25 billion from RM1.18 billion a year ago driven mainly by robust non-interest income contribution and expansion in loan book.
Net interest income was lower at RM852 million due to rising funding cost from intensifying deposits competition over the past one year.
Consequently, net interest margin (NIM) for the quarter stood at 2%, 5bps lower than the precedent quarter.
Cost-to-income ratio improved during the quarter to 42%, while operating profit grew 7.8% year-on-year to RM724 million from RM671 million a year ago.
Gross loans, advances and financing grew 4% year-on-year to RM129.8 billion led by growth in mortgages and business segments, and overseas operations.
Overseas operations saw loan expansion of 3.8% year-on-year and 4.7% quarter-on-quarter, led by Cambodia and Vietnam.
Loans-to-deposits ratio stood at 81.7% while liquidity coverage ratio stood at 117%. Customer deposits increased 4% year-on-year to RM158.8 billion mainly from fixed deposits while CASA ratio stood at 25%.
Group managing director and CEO Domenic Fuda said business momentum has gained pace with gross loans and financing expanding 4% year-on-year despite persistent challenges in the operating environment.
“We maintained a very solid asset quality position with GIL ratio of 0.81%, whilst loan impairment coverage (LIC) ratio at 128% is one of the strongest in the industry post adoption of MFRS9,” he said in a statement.
The bank’s capital position remains strong even after the adoption of MFRS9, with CET 1, Tier 1 and total capital ratios at 12.4%, 13.1% and 16.1% respectively as at end-September.
Fuda said the Malaysian economy is expected to maintain a steady growth trajectory as domestic economic activities remain supportive of growth despite looming external risks arising from shift in monetary policies and ongoing trade and geopolitical tensions.
“While there could be short-term trade-offs between growth and fiscal restoration, increased governance and subsequent return of market confidence are expected to augur well with the longer term growth prospects of the Malaysian economy,” he said.
Fuda said the bank will continue to grow its domestic franchise and regional businesses by leveraging on its branch footprint and digital capabilities.
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