It opened at 69 sen a share, just a sen below its initial public offering (IPO) price of 70 sen, but gained a sen-and-a-half to 70.5 sen about 10 minutes into the day’s trading session.
A total of 12.7 million shares changed hands, making it one of the most heavily traded counters this morning.
Executive chairman Lim Siow Jin expects the group’s share price to improve in the next one to two weeks when foreign investors begin to buy the stock.
“(Around) 90% of our strength (sales) is overseas, for (overseas investors) to buy the shares it’s not that straightforward (and requires time) to be organised,” he said.
The group’s IPO was oversubscribed by 3.2 times.
DXN said 12,146 applications for 420.12 million new shares were received for the 100 million shares made available to the Malaysian public.
The group hopes to raise RM112 million from the exercise.
Under the IPO, a total of 932.7 million ordinary shares in DXN were offered for sale. These comprised 772.68 million existing shares and a public issue of 160 million new shares.
Of the 772.7 million existing shares, which account for 15.5% of DXN’s enlarged share capital, 623.13 million shares were offered to Bumiputera investors and the remaining 149.5 million shares to Malaysian as well as foreign institutional and selected investors.
The company said 65.8% of the proceeds from the IPO, which is expected to amount to RM80 million, will be used to repay bank borrowings. Another RM17.5 million, or 14.4% of the proceeds, will be used for working capital while the remaining sum will be used to defray the cost of the IPO.
A happy return to the Main Market
DXN, which was first listed on Bursa in 2003, was de-listed in a takeover and privatisation exercise by its founder.
Lim said the de-listing was done because “we were out of focus”. At that time, the group was also involved in housing development and plantations.
Since then, DXN has consolidated its operations and focused on its health and consumer products.
“We chose (to re-list on) Bursa because after all DXN is a Malaysian company and we promote the values of Malaysia,” he added.
Group CEO Teoh Hang Ching said the company now has a cash position of RM498 million.
As of Feb 28, 2023, the group’s net gearing ratio was 0.2x, with a current ratio of 1.32x.
DXN, which now operates in 48 countries, has plans to expand its operations in North America and Africa, where they will open another five facilities, over the next two years.
Lim said the group hopes to enter the Brazil and Argentina markets by the end of the year, adding Niger, Algeria and Ghana by the end of 2024.
He said DXN would then go for the Chinese market, a step it could take in three to five years from now.
The results for the financial year ended Feb 28, 2022 show that 22.8% of DXN’s revenue came from Peru, followed by Bolivia (14.2%), Mexico (13.7%) and India (10.9%).
For the financial year ended Feb 28, 2023, the company’s profit after tax, amortisation and minority interests rose by 13.3% from RM242.9 million to RM275.4 million.
Revenue also grew strongly, by 28.8% from RM1.24 billion to RM1.6 billion in the same period.
Maybank Investment Bank is the principal adviser, managing underwriter and placement agent for the IPO.