KUALA LUMPUR: YX Precious Metals Bhd (YXPM), a wholesaler and manufacturer specialising in gold jewellery under Tomei Consolidated Bhd, made a flat debut on the ACE Market of Bursa Malaysia today, opening at 28 sen, the same as its initial public offering (IPO) offer price.
The share closed at 27 sen, 1 sen or 3.6%, lower than the IPO price. It was the most active stock of the day with 143.16 million shares traded.
Managing director Ng Sheau Chyn said the company plans to expand its hollow jewellery range because the market trend has been tilting towards lighter weight, trendy design, and the gold price has been going quite high.
“Then we will like to upgrade our operational facilities, automating some of the manufacturing processes, and provide refining services and essaying services to external customers,” she told a press conference after its listing ceremony yesterday.
The company has no plans to expand its overseas market yet. With a 6.1% market share, Ng said there is plenty of room to expand in the Malaysian market. Currently, YXPM is serving 300 retail outlets and 90% of business revenue will be from the local market.
“In the past, one of the limiting factors is the capital that we have. The industry is capital intensive and one kilo of gold is around RM250,000. So we hope to achieve higher revenue with the funds coming in.”
She added that YXPM is cautious with new customers because of their credit risk. The company mainly plans to increase revenue and profitability from its existing customers.
Ng remarked that the global environment, including the Russia-Ukraine war, has not impacted its business much as the gold price has been trading at more or less at the same level, since the conflict broke out.
She said the rising recession risk in the United States is not of much concern to it because the only thing that is affecting YXPM’s business is the gold price.
“In the past when the oil price goes up, the gold price will also go up. However, when there is an increase in interest rates, the gold price will be down. So I guess because of the war, the oil price is high but the gold price is still sustaining quite well even though there is a rise in interest rates. On top of that, the weakening of dollars also helps to sustain gold price.
YXPM’s IPO entails a public issue of 111.65 million new shares. With an enlarged issued share capital of 372.15 million, its market capitalisation was RM104.20 million upon listing.
The shares were oversubscribed by 26.36 times, demonstrating strong interest from the public, YXPM independent non-executive chairman Tan Sri Azlan Mohd Zainol said.
The company raised RM31.26 million from the listing. About RM6.90 million (22.07%) of the proceeds has been allocated to expand its hollow gold jewellery range and improve operational efficiency, while RM20.86 million (66.73%) has been earmarked for working capital requirements to meet future demand, and the remaining RM3.50 million (11.20%) will be used to defray listing expenses.
Public Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO.