From left: UUE Holdings Bhd directors Ng Lee Thin and Goh Lei Lei, director/CFO Vincent Wong, director Hin Wai Mun, chairman Lee Chye Tee, MD Datuk Dr Ting Kok Hwa, directors Chong Tuoo Choi and Latha Pillay, M&A Equity Holdings Bhd MD Datuk Bill Tan, M&A Securities deputy head of corporate finance Rachel Ho and head of corporate finance Gary Ting (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (July 2): UUE Holdings Bhd (KL:UUE) made a strong debut on the ACE Market of Bursa Malaysia on Tuesday as its share price shot up 189.58% or 45.5 sen to settle at 69.5 sen, versus its initial public offering (IPO) price of 24 sen.

After opening 175% higher at 66 sen, the ACE Market stock moved to its highest at 70.5 sen, while its intraday low was 61 sen.

At the closing price of 69.5 sen, UUE's market capitalisation stands at RM422.76 million — four times higher than its expected market capitalisation of RM146 million during its prospectus launch.

Trading volume rose to 212.32 million, making it the most active stock and biggest gainer on Bursa.

The big jump in share price makes UUE, whose core business is involved in underground utility engineering solutions, the best-performing IPO so far this year, followed by Main Market-listed oil and gas firm Keyfield International Bhd (KL:KEYFIELD) and ACE Market’s building support services provider KJTS Group Bhd (KL:KJTS).

UUE’s was also the fourth-best maiden day trading performance of an ACE Market IPO stock in the past one year, after Oppstar Bhd (KL:OPPSTAR), TT Vision Holdings Bhd (KL:TTVHB) and Edelteq Holdings Bhd (KL:EDELTEQ).

UUE’s issued share capital stood at 608.29 million shares. The company offered 162.37 million shares for its listing exercise.

Worth noting that the top five best-performing IPO companies in 2024 have issued share capital below one billion shares, while the top five worst-performing IPO companies have over one billion issued share capital, except for property developer KTI Landmark Bhd (KL:KTI), according to data compiled by The Edge.

Companies with higher number of shares issued translate to more shares available for trading, which could potentially put downward pressure on the share price should demand remain constant or lacklustre.

Conversely, for those with a lower number of shares issued and available for trading, the limited supply could push share prices higher with even a small number of buyers bidding for the shares.

Three research houses — Apex Securities Bhd, Mercury Securities Bhd and TA Securities Holdings Bhd — have all urged investors to participate in UUE’s IPO, citing the company attractive valuations and promising growth prospects, as it rides on rapid growth in the utility industry from the electricity and telecommunication sectors.

Commenting on the company's strong debut at a press conference following the listing ceremony, UUE managing director Datuk Dr Kenny Ting Kok Hwa said the group is "truly honoured by investors’ confidence and trust in our business model. We will work hard to deliver our growth strategy and deliver back to our shareholders,” he said.

Demand from investors during its IPO was strong with the public tranche oversubscribed by 103.83 times. The Bumiputera portion was oversubscribed by 74.03 times, while the remaining public portion was oversubscribed by 133.64 times.

Shares set aside for eligible persons, Bumiputera investors and select investors offered through private placement were fully taken up.

The sale of new shares raised RM29.98 million, which has been earmarked for the purchase of machinery and equipment, such as horizontal directional drilling (HDD) machines, lorries and excavators to cater for its ongoing projects as well as new ones to be secured.

UUE also wants to buy a maxi-rig drilling machine to venture into subsea works and expand its existing suite of underground utilities engineering offerings.

The remaining gross proceeds have been earmarked for general working capital, and to offset expenses in relation to the IPO.

The offer-for-sale, meanwhile, raised RM8.99 million, which will accrue entirely to the selling shareholders, including managing director Datuk Dr Ting Kok Hwa.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO.