(From left) Sorento Capital Bhd independent non-executive directors Teh Lay Sim, Yeat Soo Ching and Christine Toh Hung Mei, executive director Jayden Loo Jing Kai, managing director Loo Chai Lai, chairman Ahmad Zakie Ahmad Shariff and executive director Lee Chee Keong, with Alliance Bank Malaysia Bhd group chief corporate banking and capital markets officer Teoh Chu Lin, corporate finance head Tee Kok Wah, and head of coverage and origination Lim Shueh Li on Monday. (Photo by Patrick Goh/The Edge)

KUALA LUMPUR (Oct 28): Sorento Capital Bhd (KL:SORENTO) ended its maiden trading day on the ACE Market of Bursa Malaysia up half a sen or 1.35% to 37.5 sen from its initial public offering (IPO) price, valuing the bathroom and kitchenware distributor at RM322.5 million.

The counter opened at 37.5 sen, compared to its IPO price of 37 sen, and traded in a tight range of between 36 sen and 39 sen through on its first day on Bursa Malaysia.

It was the most active stock on the local exchange on Monday, with 142 million shares exchanged.

At its last close, the company was valued at 13.2 times earnings, based on a profit after tax of RM24.43 million for its financial year ended June 30, 2024 (FY2024). This compares with industry average of 18.6 times trailing PER.

Investors snapped up Sorento shares during the IPO, with the public portion oversubscribed by 39 times. Shares set aside for eligible persons were also fully subscribed, while the private placement to select investors were also taken up.

The IPO comprises a public issue that raised RM57.4 million and an offer for sale grossing RM27.4 million. More than half of the proceeds have been earmarked for the purchase of inventories. The company will also use 10% for branding and promotions, and another 10% for the expansion of its dealer network.

Sorento will also utilise 16% for repaying bank borrowings, and the rest to defray listing expenses.

Funds raised from the offer for sale meanwhile went entirely to Sorento managing director Loo Chai Lai.

Sorento is also the authorised distributor for foreign luxury third-party brands of bathroom and kitchen sanitary ware products, including the non-exclusive distributorship of the German brand "Bravat", and the exclusive distributorship of the Spanish brand "Infinity" in Malaysia.

 

Alliance Islamic Bank is the IPO’s principal adviser, sponsor, sole placement agent, and sole underwriter.

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