The electronics manufacturing services (EMS) provider plunged as much as 19 sen or 22% to 69 sen in early morning trade, falling below its IPO price of 90 sen.
The group pared its losses at the mid-day trading break, down 16% at 74 sen. It ended the day 19.6% lower at 71 sen, valuing the group at RM700.69 million.
This was the fifth consecutive day of decline for Cape EMS, pushing it 21% below its initial public offering (IPO) price of 90 sen per share when it was listed 16 months ago.
The counter has been on a downward trajectory in recent months, falling 33.6% year-to-date.
Intraday short selling of its shares will resume on Monday, according to Bursa Malaysia Securities.
Headquartered in Senai, Johor, Cape EMS specialises in contract electronics manufacturing, box build and full turnkey projects, as well as total supply chain management. The group also has factories in Tebrau and Kempas in Johor, and a testing facility in Singapore.
Its net profit grew 32% to a high of RM44.38 million for the financial year ended Dec 31, 2023 (FY2023) from RM33.54 million the previous year. Revenue rose 24% to RM542.8 million in FY2023 compared with RM437.9 million the year before.
Earnings below market expectations
However, there was investor disappointment over its fourth quarter (Q4 FY2023) net profit which fell 38% to RM5.5 million from RM8.93 million a year ago, partly due to finalised tax expenses and higher operational costs.
This saw the stock hitting its then all-time low in early March as earnings came in short of market expectations.
At that time, its managing director and group CEO Christina Tee acknowledged the need to better manage market expectations but urged investors to consider the company’s “longer-term potential”.
Christina, 57, who founded the company in 2013, is the largest shareholder with a 38.1% stake while her sister, Kim Yok, 47, holds a 6.8% stake as at Mar 29, 2024.
The company was listed in March 2023 following an IPO which raised RM155.7 million.
In mid-December 2023, it raised another RM73.83 million by placing out 69 million shares at RM1.07 each to help fund its US$16.5 million (RM76.8 million) acquisition of US-based EMS company iConn Inc.