Kim Teck Cheong sizzles in debut on Bursa

KUALA LUMPUR: Sabah-based consumer packaged goods distributor Kim Teck Cheong Consolidated Bhd (KTC) made a sizzling debut on the ACE Market of Bursa Malaysia yesterday with its share price closing 17 sen, or 113%, higher at 32 sen.
KTC was the most active counter yesterday, with some 198.5 million shares changing hands. It opened at 30 sen, which was double its issue price of 15 sen, with 14.01 million shares traded.
Executive director Dexter Lau (pix) said the board was pleased with the share price, adding that it was driven by investors’ confidence in the group’s strong fundamentals.
“Today’s listing of KTC will serve as a concrete platform to expand the company’s potentials to the next level,” he told reporters after the listing ceremony yesterday. “It will open up various avenues of opportunities and support for KTC to continuously work towards executing our expansion plans and architect out our future business strategies.”
The listing raised RM21.3 million for the group, of which about 42% will be used to finance its expansion plans, including the acquisition of warehousing facilities in Sibu, Miri and Kuching, Sarawak.
On the group’s expansion in Brunei, Lau said KTC plans to establish a distribution centre there by acquiring a Brunei-based company for RM1.54 million, which it expects to conclude by the first quarter of 2016.
He said discussions are still ongoing, adding that the group intends to use internal funds and not those from the initial public offering for the acquisition.
With the acquisition, KTC will have 19 distribution centres, up from 18 distribution centres currently, across Sabah and Sarawak with 6,419 sales and distribution points.
On the group’s financial performance, Lau said he expects a strong double-digit growth for the financial year ending June 30, 2016, noting the group is trending at 15% growth in revenue for the past few years.
“It is going to be a very optimistic year for KTC,” he added.
For the first quarter ended Sept 30, 2015, KTC recorded a net profit of RM2.48 million, on revenue of RM78.65 million.
Lau said the distribution of third-party brands contributes 90% to the company’s revenue and in-house brands the rest. Third-party brands that KTC distributes include Gillette, Dynamo, Coca-Cola, Kimberly-Clark, Revlon and Shiseido.