New Listing Solid Auto rises 14% on maiden trading day

by **Cals** Thu 12 Sep 2013, 22:35

New Listing Solid Auto rises 14% on maiden trading day
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Thursday, 12 September 2013 17:52

KUALA LUMPUR (Sept 12): Solid Automotive Bhd gained 8 sen or 14.3% to end at 64 sen against its IPO price of 56 sen per share, on its maiden listing day today.

The most-actively traded stock, which attracted a total trading volume of 110,609,300 shares today, opened at 60 sen. Throughout the day, it had hit a high of 68.5 sen and a low of 58.5 sen.

TA Securities has given a TP of 56 sen for the stock while Kenanga Research sees its full value at 57 sen.

At the listing ceremony this morning, the company, which is involved in automotive after-market parts and components business, said it is looking into expansion of the automotive-component trader's operations locally and abroad.

Executive director and chief financial officer Ong Kheng Swee said Solid Automotive would strengthen its supply chain by setting up an office in Shanghai, China.

“Currently, we are targeting emerging markets and have been exporting to the Philippines, Mexico, Brazil and Egypt.

“Exports, which make up 40% of our target markets, are focused mainly in countries in the Middle East and South America," Ong told reporters at Solid Automotive's listing ceremony here today.

On the depreciating ringgit against the US dollar, Ong said foreign exchange fluctuations will always have an impact on the group.

“The US dollar had strengthen by an estimated 7% in 1Q and thus affected our performance in that quarter,” Ong said.

Meanwhile, Solid Automotive chairman Chee Ho Chun said the company's debut on the Main Market of Bursa Malaysia marks a new day and responsibility for the firm.

Chee said : “It is a new commitment to move forward to scale greater heights of business performance and achieve greater value creation for our business associates as well as our new shareholders".

Solid Automotive has raised RM19.8 million from its IPO (initial public offering).

The firm will use RM12 million of the proceeds for capital expenditure (capex) while RM5.3 million will be utilised for working capital. A total of RM2.5 million has been earmarked to defray listing expenses.

Of the RM12 million capex allocation, a total of RM9 million will be utilised to acquire a vacant land in Johor Bahru.

Solid Automotive plans to construct an integrated-operations complex on the site. The complex will house its corporate office, warehouse as well as production, repacking and packaging facilities.

As for the remaining RM3 million, it will be utilised for the CONSTRUCTION [] of the new sales office and warehouse in Kuala Lumpur.