At Smart Asia Chemical Bhd's listing ceremony on Bursa Malaysia's ACE Market on Tuesday were (from left) independent non-executive directors Ang Hock Seng, Yap Yung Chien and Tan Suat Hoon, non-independent ED and chief operating officer Lim Kok Beng, managing director Goh Chye Hin, non-independent ED Kee Hui Lang, and independent non-executive chairman Yau Yin Wee, with Mercury Securities Sdn Bhd MD Chew Sing Guan and head of corporate finance Eric Chong, and Bursa chief regulatory officer Julian M Hashim.

KUALA LUMPUR (May 28): Smart Asia Chemical Bhd (KL:SMART) ended its first day on the ACE Market with 15% gain on Tuesday after the industrial paint and coating manufacturer raised RM37.4 million from an initial public offering (IPO).

The stock opened at 50 sen versus its IPO price of 40 sen per share before climbing as much as 26.25% to 50.5 sen. Smart Asia closed at 46 sen, valuing the company at RM170.13 million, after 74.07 million shares changed hands on Bursa Malaysia.

The counter saw high demand from investors as its IPO was oversubscribed by 33.38 times, with the Bumiputera portion oversubscribed by 28.77 times, and the other public category saw an oversubscription rate of 37.98 times.

Shares made available for eligible directors, employees and other persons who had contributed to the success of the group were fully subscribed. Meanwhile, the shares allocated for selected investors by way of private placement to Bumiputera investors were also fully placed out.

Smart Asia Chemical’s primary operations involve developing, manufacturing, distributing, and selling a diverse array of decorative paints, protective coatings for both household and industrial use, and other paint-related products.

It currently has nine wholesalers and 937 dealers in Malaysia, along with 14 authorised distributors in overseas markets, including Singapore, Brunei, Indonesia, Cambodia, Vietnam, and Myanmar.

Proceeds from the IPO totalling RM37.4 million will be allocated to partially finance the construction of a plant in Perak amounting to RM16 million, while RM11 million will be used for the purchase and commissioning of an automated paint production system.

"With the expansion of our Perak manufacturing plant, we are confident in our increased capacity and excited for what lies ahead. We look forward to continuing our growth, staying passionate about enriching people's lives with our colours, and bringing joy and vibrancy to their world,” managing director Goh Chye Hin said during the listing ceremony on Tuesday.

Meanwhile, Smart Asia Chemical has also allocated RM5 million of the IPO proceeds for the purchase of 250 sets of smart colour POS tinting machines, while the remaining RM1.3 million will be allocated for working capital, and RM4.1 million to defray listing-related expenses.

The IPO reduced the direct stake of Goh to 44.5%, and to 7.51% for his wife Kee Hui Lang, who is also a non-independent executive director.

On the financial front, Smart Asia Chemical recorded a profit after tax of RM8.81 million for the financial year ended Dec 31, 2023 (FY2023), up 2% from RM8.61 million for FY2022. Revenue rose 15% to RM91.09 million for FY2023, from the RM79.22 million recorded a year earlier, thanks to higher sales of decorative paint.

Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter, and sole placement agent for the IPO exercise.