KUALA LUMPUR (Jan 29): Master Tec Group Bhd, which made its debut on the ACE Market on Monday, anticipates an increase of at least 2% in its market share within the Malaysian wires and cable manufacturing industry post-capacity expansion by the second quarter of this year (2Q2024).
The group, which held a market share of 3.57% in 2022, is en route to commence operations of two new medium voltage (MV) power cable manufacturing plants in Melaka.
In a press conference following its listing ceremony, Master Tec chief executive officer Tee Kok Hwa stated that the current market value of Malaysia's cable and wire industry is approximately RM10 billion, and when including imported cable and wire, this figure increases to RM15 to RM20 billion.
"We strongly believe that after the MV production line is in operation, Master Tec's market share will improve by at least another 2%," Tee said.
The group has allocated RM16.78 million or 27.22% of the proceeds from its initial public offering (IPO) for the two plants.
Another RM24.39 million or 39.55% of the proceeds from the public issue will go towards the purchase of new machinery and equipment.
Master Tec’s key customers include Accupro Group and Tenaga Nasional Bhd, which contributed around 32% of group revenue in the financial year ended Dec 31, 2020 (FY2020).
In the first six months of 2023 (1HFY2023), Master Tec's net profit came in at RM13.63 million, on revenue of RM138.04 million.
Aside from the plant expansion and machinery purchases, Master Tec will use RM16.29 million or 26.42% of the IPO proceeds for general working capital, while the remaining RM4.2 million (6.81%) is allocated for listing expenses.
On Master Tec opening flat at its IPO price of 39 sen, Tee expressed that this outcome aligns with the group's expectations, emphasising its focus on long-term investment.
"We have been in this industry for 18 years, and we believe that cables are a necessity, and our product is for consumer use. We don't expect drastic ups and downs (movement in the share price)," he added.
Master Tec's Bursa debut saw the stock trade between 35.5 sen and 40 sen, before ending its maiden trading day at 36 sen — down three sen or 7.69% from its IPO price of 39 sen — for a market capitalisation of RM367.20 million.
The counter was the fourth most active on Bursa Malaysia, with 106.8 million shares changing hands.
Master Tec’s IPO comprises a public issuance of 158.1 million new shares, or 15.5% of the enlarged share capital 1.02 billion shares, and an offer-for-sale of 127.5 million existing shares or 12.5% stake.
The selling shareholder is managing director Datuk Lau Kim San, who will hold a 17% direct and 55% indirect stake in Master Tec post-listing.