It opened at 81 sen, notching up a premium of 43 sen, or 113.2%, over its IPO price, with 65.81 million shares changing hands.
The EMS provider had earlier reported its shares were oversubscribed by 16.49 times. The group raised RM165.5 million through its IPO exercise, making it the largest listing on the ACE Market.
At mid-day close, its share price settled at 94 sen, giving it a market capitalisation of RM1.97 billion.
“We did expect a premium at the opening bell but we didn’t expect it to go this high. This is a testimonial to the public’s confidence in NationGate’s business model and future plans,” managing director Ooi Eng Leong told a press conference after the listing ceremony today.
He added the listing will provide the company with greater financial resources to pursue growth opportunities and retain and attract experienced professionals in the EMS industry.
NationGate is set to ride on the networking, telecommunications and automotive sectors’ boom given the widespread deployment of 5G networks and high demand for electric vehicles (EV).
Ooi said the group is operating from its EMS manufacturing facilities in Seberang Prai and Taiping.
“We believe that 5G adoption and EV are going to have a positive impact on the networking, telecommunication and automotive sectors, which in turn will benefit NationGate,” he added.
Corporate services director Tay Seng Chew said NationGate’s order book is set to remain strong. He said it is a 100% export-oriented EMS company, and its primary customers are major global players.
“As China is opening up, we believe the economy will be more buoyant in the Asia-Pacific region. I believe many Chinese manufacturing products have to move out and I think they will flow into Asean countries. We will benefit from it,” he added.
As of Nov 13, NationGate had unbilled purchase orders of RM369.5 million, which were to be billed upon delivery progressively over the next 12 months.
Rakuten Trade expects NationGate’s earnings to achieve “exponential growth” over the next two years. The surge in its share price had surpassed the brokerage house’s target price of 76 sen.
It noted NationGate has a 12-year track record with broad regional customer base spanning Asia, the US and Europe.
“Malaysia is the largest revenue contributor accounting for more than 70% for the last three years,” Rakuten Trade said in a note.
NationGate has 31 surface mount technology (SMT) assembly lines that are flexible and modular thus allowing them to provide customisable assembly lines to manufacture both high-mix-low-volume and low-mix-high-volume set ups.
Protégé Associates Research anticipates the EMS industry to grow with a five-year compound annual growth rate (CAGR) of 10.3% over 2022 to 2027, contributed by the increased outsource of manufacturing operations from end-user markets.
Surging adoption of electronic content in traditional and non-traditional markets like automotive and consumer electronics will also contribute to its growth, it said.