KUALA LUMPUR: Tashin Holdings Bhd, which made its debut on the ACE Market of Bursa Malaysia today, slid 16.3% to 48.5 sen at the close of its first trading day, against its offer price of 58 sen.

The stock’s opening price and intraday high stood at 58 sen. It was the sixth most active stock on the bourse today with a total of 53.15 million shares traded.

The group said in a statement today that it is setting up a factory and upgrading its existing steel processing line in Seberang Prai, Penang, as part of its plans to expand the steel processing business segment post-listing.

Tashin managing director Lim Choon Teik said the factory will have additional steel processing lines and five new wire mesh production lines with a combined effective production capacity of 50,000 mt per annum.

“We plan to utilise RM25.25 million from the initial public offering (IPO) proceeds to expand our business operations after listing,” he said. The new factory to produce wire mesh is expected to be completed by 2021.

Tashin’s current core activity is steel processing and manufacturing of steel products. Trading of wire mesh and the expansion into the manufacturing of wire mesh will enable it to have control over the supply of wire mesh.

In turn, the manufacturing of wire mesh will enable the company to diversify its manufacturing products and improve its profitability.

“We believe the addition of wire mesh in our manufactured product offerings will allow us to improve our profitability and strengthen our customer base, which in turn will enhance our competitive position. Our plans to make new products will hinge on the market developments,” Lim added.

Under the listing exercise, Tashin raised RM34.41 million from its public issue of 59.33 million new shares at 58 sen per share.

Of the total IPO proceeds, RM17.55 million (51%) will be used to purchase an industrial land in Seberang Perai for the construction of a new factory with a total floor space of 90,000 sq ft.

It will further utilise RM7.7 million (22.38%) to purchase machinery and equipment to support its business expansion into the manufacturing of wire mesh and to upgrade the existing steel processing line.

About RM5.96 million (17.32%) will be used as general working capital while the remaining RM3.2 million (9.3%) to be used to defray listing expenses for the IPO.

Based on the enlarged share capital of 348.99 million shares, Tashin is expected to have a market capitalisation of RM202.41 million.