Steel Hawk deputy chairman Datuk Sharman K Michael expects a bright prospect for the company underpinned by national oil company Petroliam Nasional Bhd’s annual capital expenditure to ensure the long-term growth of Malaysia’soil and gas production. (Photo by Sam Fong/The Edge)

KUALA LUMPUR (Sept 5): Steel Hawk Bhd (KL:HAWK), an oil and gas (O&G) services company, made a red-hot debut on the ACE Market of Bursa Malaysia with a 130% gain on Thursday.

Steel Hawk closed at 34.5 sen versus its initial public offering (IPO) price of 15 sen per share, giving it a market capitalisation of RM169.05 million. Its share price doubled at the open to 30 sen per share with 6.49 million shares changing hands. The counter reached an intraday high of 38.5 sen, leading the most active stocks on Bursa Malaysia throughout the day.

Steel Hawk is the first company that underwent the new market transfer framework for the Leading Entrepreneur Accelerator Platform — better known as the LEAP Market — to the ACE Market. The framework was introduced in April last year.

Previously, LEAP Market companies needed to delist before applying to ACE Market.

Steel Hawk emerged as the fourth best performing IPO so far this year after underground utility engineering solutions provider UUE Holdings Bhd (KL:UUE) that closed its first day of trading 190% above its IPO price of 24 sen.

Steel Hawk ranked fourth among this year's top-performing IPOs, following UUE Holdings Bhd (KL:UUE) up 190%, Ocean Fresh Bhd (KL:OFB) gained 175%, and Go Hub Capital Bhd (KL:GOHUB) surged 171.43% on their first day debut.

Steel Hawk saw strong demand for its IPO, with the offering oversubscribed by 276.83 times — the highest subscription rate so far this year.

The Bumiputera portion saw an oversubscription rate of 245.25 times, while the public portion recorded an even higher oversubscription rate of 308.4 times. New shares allocated to eligible persons and selected investors were fully subscribed, and the offer for sale of existing shares was also fully taken up.

Steel Hawk is involved in the provision of engineering, procurement, construction, and commissioning services for chemical injection skids, and improvement or maintenance of topside O&G facilities. It also sells, installs and maintains oilfield equipment.

Steel Hawk sees bright prospects ahead

Steel Hawk deputy chairman and executive director Datuk Sharman K Michael expects a bright prospect for the company underpinned by national oil company Petroliam Nasional Bhd’s (Petronas) annual capital expenditure to ensure the long-term growth of Malaysia’s O&G production.

“The recent discovery of potential hydrocarbon reserves in the Langkasuka Basin located on the west coast of Peninsular Malaysia presents opportunities for future exploration and development,” Sharman said after the company’s listing ceremony.

While Petronas remain as Steel Hawk's primary client, the company has diversified its customer base since 2021 and is exploring opportunities in the green energy sector

Petronas accounted for approximately 86% of Steel Hawk's revenue in FY2021 (RM21.33 million), dropping to 54.47% (RM36.13 million) in FY2022 and 45.64% (RM33.1 million) in FY2023.

“We are trying to diversify our customer base within the same sector, but Petronas will remain our key client,” Sharman said.

Steel Hawk has earmarked 51% of its RM13.5 million proceeds from its IPO for the construction of the proposed Teluk Kalung Facility 2 in Terengganu, where it recently secured a scaffolding services contract from Petronas Chemicals Group Bhd (KL:PCHEM).

The company also earmarked 15% of the proceeds as working capital and 7.4% for the repayment of bank borrowings.

Steel Hawk shareholders include Sharman and his wife Annie V Sinniah, as well as Radiant Capital Sdn Bhd, which is a private investment vehicle of Steel Hawk chief executive officer Salimi Khairuddin and chief operating officer Khairul Nazri Kamaruddin.