KUALA LUMPUR (Oct 6): Integrated water technology solutions provider Cosmos Technology International Bhd made a firm debut on the ACE Market of Bursa Malaysia, rising to a high of 58 sen in active trade in the mid-morning.
At 10.05am on Thursday (Oct 6), the counter stood at 58 sen, from its initial public offering (IPO) price of 35 sen, with 77.24 million shares done.
Cosmos’ 12.83 million shares were oversubscribed 58.01 times.
Its managing director Datuk Chong Toh Wee said that the listing has given the company financial flexibility to streamline and consolidate its operations, automating production processes, and boosting efficiency and productivity levels.
Chong added that the company has allocated RM10 million out of the RM22.4 million raised from the IPO to acquire a semi-detached building that contains a factory, office and warehouse in Balakong, Selangor, to streamline and consolidate its operations.
“In addition, RM3.5 million will be used for the purchase of new machinery that will be installed in the new building, so that we can have a higher output and increased automation to expand our manufacturing operations.
“To strengthen our balance sheet, RM1.5 million will be used to pare down our bank borrowings, and RM4.44 million will be used to finance our working capital”, he said.
Cosmos has an optimistic outlook on its business due to robust demand for electronic flow meters from the water and wastewater industry in Malaysia.
It also expects strong demand for fabricated metal products used in the oil and gas sector as crude oil prices remain at attractive prices.
Cosmos was initially listed on Bursa as a LEAP Market entity on March 9, 2020 at 28 sen.
“Subsequently, our company was delisted on Nov 10, 2021 to facilitate the listing on the ACE Market,” Cosmos had said.
Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.
Rakuten Trade, which has a “buy” rating for the stock with a target price of 39 sen, said it expects Cosmos to deliver a net profit of RM6.12 million for financial year 2023 (FY23) and RM9.96 million for FY24.
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