KUALA LUMPUR: High-grade calcium carbonate producer Zantat Holdings Bhd made its debut on the ACE Market of Bursa Malaysia Securities today, opening at 40 sen per share, representing a premium of 15 sen or 60% above its initial public offering (IPO) price of 25 sen.
At the opening bell, the counter saw six million shares changing hands.
The counter closed at 37.5 sen, 12.5 sen or 50% above the IPO price, on volume of 92.909 million shares.
The company will use RM3.8 million (27.4%) raised from the IPO to upgrade its research and development (R&D) centre and purchase additional test and product development equipment.
Some RM1.4 million (9.6%) will be used to purchase high efficiency machine components such as fully integrated automatic robotic arm palletising system and high-efficiency motors to automate its packing system and move towards industrial automation.
The remainder will be used to upgrade Calrock Perak Plant’s infrastructure amounting to RM1 million (7.2%); working capital RM1.4 million (10.2%), repay bank borrowings RM3.4 million (24.2%) and defray the estimated listing expenses of RM3 million (21.4%).
Zantat raised RM14 million from the public issue of 56 million new shares to fund its venture into the bioplastics value chain and for the expansion of its core business of calcium carbonate production. Upon listing, it has an enlarged share capital of 280 million and a market capitalisation of RM70 million.
According to managing director Ivan Chan, the rubber glove sector is expected to recover, after a sluggish market trend for close to two years.
“Some of our products are being used as filler in the glove industry. So once the glove industry recovers, it will generate extra revenue and profit margin for us.”
He shared that during the Covid-19 pandemic, its export business was affected significantly although the rubber glove sector sustained it.
“In terms of export, currently the Red Sea crisis has not impacted us. We have been monitoring ocean shipping because we export a lot of our products to India and it's been relatively stable until today,” Chan said at a press conference after Zantat’s listing ceremony.
He added that it hopes to attract more talent to join the company to strengthen its R&D capabilities following its listing.
In terms of revenue contribution, Chan said India accounts for the bulk at 60%, followed by Malaysia at 30%, while the remainder is attributed to other markets such as Indonesia, the Philippines and Thailand.
Going forward, he said the company expects the same contribution to remain, particularly in the Indian market as “their plastic demand is growing”.
“For our new products we are planning to expand our footprint to Australia, New Zealand and even in Europe. For these bioplastic products, we are collaborating with a strategic partner to produce compostable garbage bags, which will be exported to these countries, hopefully within this year,” he remarked.
In the last four financial years, more than 82% of Zantat’s revenue was derived from production of ground calcium carbonate, followed by 10% to 15% from the production of calcium carbonate dispersion and kaolin dispersion for glove manufacturing.
For the financial year ended Dec 31, 2023, Zantat’s net profit grew 25.9% to RM6.8 million from RM5.4 million in FY22, as revenue increased 8.7% to RM122.8 million from RM113 million a year prior.
