SDS Group makes steady debut on ACE Market

KUALA LUMPUR: Home grown bakery products manufacturer and distributor SDS Group Bhd made a steady debut on the ACE Market of Bursa Malaysia on Monday, opening at 26 sen, which was three sen above its offer price of 23 sen.

At 9.03am, it was trading at 26 sen with 32.82 million shares done.

The FBM KLCI was up 0.61 of a point or 0.04% to 1,558.28. Turnover was 112.87 million shares valued at RM37.86mil. There were 134 gainers, 45 losers and 165 counters unchanged.

SDS Group’s offer of 20.29 million new shares to the public under its initial public offering (IPO) was oversubscribed by 11.34 times.

There were 3,065 applications for 250.41 million new shares, valued at RM57.59mil.

Under the IPO, SDS Group raised RM23.99mil from the issuance of 104.29 million new shares at 23 sen per share.

Of the total IPO proceeds, RM6mil (25.0%) will be used to expand its business in the wholesale and retail channels within the northern and central regions of Peninsular Malaysia respectively with the additional capacity from its new manufacturing plant in Seremban.

Another RM7.79mil (32.5%) will be used for general working capital; RM7mil (29.2%) to repay bank borrowings and RM3.20mil (13.3%) to defray listing expenses for the IPO.

Mercury Securities Research has accorded a target price of 30 sen for the shares, which is 29% above its initial public offer price of 23 sen.

The target price was based on 13 times price-to-earnings of its estimated EPS of 2.3 sen for FY20E.

SDS Group’s core activities are manufacturing and distributing of bakery products, and operating food and beverages (F&B) outlets.

Source: TheStar