KUALA LUMPUR: Ocean Fresh Bhd jumped almost three fold, or as high as 93 sen in the first hour of its trading debut on the ACE Market of Bursa Malaysia today.
The frozen seafood company made a strong debut at 85 sen, 203.6 per cent or 57 sen higher than its initial public offering (IPO) price of 28 sen.
As at 11:11 am, Ocean Fresh's share price is up 183.9 per cent or 51.5 sen to 79.5 sen, valuing the company at RM167.1 million with 113 million shares were traded.
Ocean Fresh is a Pahang-based frozen seafood processor and exporter that also provides frozen seafood processing services to its customers in Malaysia, Turkiye, China, Thailand, Vietnam and Japan.
Its wide network of customers comprising over 160 local customers and 190 overseas customers in more than 10 countries.
The company allocated more than half, or RM8 million, of the proceeds from its IPO for its new cold storage facility in Kuantan, Pahang.
It also will use RM2.51 million for working capital requirements, and RM3.5 million on estimated listing expenses.
In its first quarter (Q1) ended March 31, 2024, the company has recorded a net profit of RM2.5 million with its revenue stood at RM55.5 million.
According to CGS International, Ocean Fresh's revenue growth is underpinned by higher selling prices, higher export revenue from key overseas markets and new customers.
Its average gross profit (GP) margin of 11 per cent in FY20-23 is supported by favorable selling prices and better cost management.
"The group reported a steady increase in net profit in FY20-23, with a commendable three-year net profit compounded annual growth rate (CAGR) of 41 per cent on the back of growing export sales and minimal tax expense (export sales tax exemption; FY23 effective tax rates stood at just 0.5 per cent)," it said in a note.
The research firm also pointed out the company's healthy balance sheet with net cash positions in FY20-23 and very minimal debt.
At the end of FY23, CGS International said the net cash stood at RM6.7 million or 11 per cent of its targeted market capitalisation of RM59 million.