PETALING JAYA: SDS Group Bhd shares recorded a 2.5 sen or 10.9% premium to 25.5 sen against its offer price of 26 sen for its listing on the ACE Market of Bursa Malaysia today.
The stock hit an intraday high of 27 sen, but pared down gains to 25.5 sen at market close with 108.7 million shares changing hands.
SDS Group is a homegrown bakery product manufacturer and distributor with Top Baker and Daily’s brand in its portfolio along with 33 food & beverage (F&B) outlets in Johor.
Its listing exercised raised RM23.99 million, of which RM6 million (25%) will be utilised to expand its business presence for both the wholesale and retail channels within the northern and central regions of Peninsular Malaysia with the additional capacity from its new manufacturing plant in Seremban.
Following the listing, the group is expected to open eight F&B outlets in the Klang Valley over the next two years.
“We expect to open three food & beverage outlets by October 2020, while the remaining five outlets by October 2021,” said SDS managing director Tan Kim Seng in a press release.
With regards to its expansion plan into Penang and Kedah, he said that it will set up two new depots in Bukit Mertajam, Penang and Sungai Petani, Kedah and purchase 18 new delivery vehicles.
“To grow our wholesale business in order for us to extend the reach of our bakery products, we need to widen our distribution network and increase our logistics coverage,” said Tan.
He said that the logistics capacity expansion in Penang and Kedah will will enable the group to cover the northern region.
Currently, it has 19 depots across Peninsular Malaysia and 250 one-tonne delivery vehicle to distribute its products to 10,000 customers which include convenience stores and supermarkets.
Proceeds from the IPO will also be used for general working capital requirements (RM7.79 million) and repayment of bank borrowings (RM7 million).