Mi Equipment rebounds from weak start to end above IPO price in debut on Main Market

PETALING JAYA: Mi Equipment Bhd, the first Main Market listing this year, opened 3 sen or 2.1% discount to its initial public offering (IPO) price of RM1.42 per share amid weak market sentiment arising from the US-China trade spat.
However, the stock was quick to rebound as much as 21 sen or 14.8% before closing 12 sen or 8.5% higher at RM1.54 on 73.68 million shares done, giving it a market capitalisation of RM770 million.
Mi Equipment manufactures wafer level chip scale packaging (WLCSP) sorting machines, which are used in the semiconductor industry.
Over the years, it has strengthened its presence in the international arena by growing its global client base. For 2016 and 2017, more than 80% of revenue was derived from overseas.
The group raised about RM190.89 million in its IPO, of which almost 74% or RM140 million will be utilised for the construction of two new factories in Bayan Lepas and Batu Kawan, Penang, over the next two years.
The Bayan Lepas factory is expected to be completed by the first quarter of 2019 and the Batu Kawan factory by the third quarter of 2020.
Another RM36.79 million will be used for working capital, and the rest for research and development and to defray listing expenses.
Mi Equipment CEO and executive director Oh Kuang Eng said the group will focus on completing the construction of its new factories to secure orders on a larger scale from existing and new customers.
Rakuten Trade has a 'buy' call on Mi Equipment with a target price of RM2.30.
"Mi Equipment's technical expertise in WLCSP sorting machines will enable them to capitalise on the growing mobile communications industry. EPS (earnings per share) is expected to expand by around 6% and 15% for FY18 and FY19 respectively," it said in a research note today.