CEKD Bhd Makes a Great Start on the Ace Market With a Share Price of 60 Sen

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CEKD Bhd, a provider of die-cutting solutions, began trading on the ACE Market on Wednesday at 60 sen, a premium of 12 sen or 25% over its initial public offering (IPO) price of 48 sen.

The counter saw 6.29 million shares traded at the opening bell.

Its independent non-executive chairman Datuk Zulkifli Adnan said the IPO is likely to provide the group more visibility and aid in the expansion of the business.

“We have ambitions to expand our operations and manufacturing services in our present areas, as well as to strengthen our position in Southeast Asia and the Middle East, following our IPO.

“We feel there are numerous prospects in these sectors as a result of expansion in the electrical and electronics (E&E), plastic and packaging, automotive, and textile and leather industries,” he said during Wednesday’s virtual listing ceremony.

CEKD stated on Sept. 21 that the public component of its first public offering was 131.61 times oversubscribed.

The group sought to raise RM24.28 million through the first public offering.

CEKD is a manufacturer of die-cutting moulds and a distributor of related consumables, tools, and accessories primarily for the paper printing and packaging industry, the engineering and construction industry, and a variety of other industries, including automotive, plastic packaging, textile, and leather.

Managing director Yap Kai Ning stated that RM8.8 million of the profits would be utilised to enhance the company’s current facilities and to acquire a factory for its wholly-owned subsidiary Hotstar (M) Sdn Bhd in order to improve manufacturing capacity.

“We intend to invest in two new facilities in Kepong in order to consolidate the Hotstar business and boost efficiency. Hotstar now operates from three separate sites. As a result of the consolidation, we are confident that we will improve our efficiency and management capability as well,” she explained.

Yap stated that the remaining earnings would be used to acquire new machinery, RM1.3 million to upgrade and develop computer software and servers, and RM4 million to repay bank borrowings.

The remaining funds will be utilised for marketing, general working capital, and listing charges.

“We will invest in technology, software, and new machineries to expand our competence in response to increased demand for die-cutting mould accuracy, the packaging industry’s rapid turnover, and the complex packaging required.

“We will also invest in software and systems to automate some operational procedures in line with Industry 4.0 to expand automation throughout our business, and this will be a critical investment to support our future growth,” she added.

Along with the rapid growth of e-commerce, Yap predicted that increased demand for packaging materials such as paper boxes and corrugated boxes, as well as eco-friendly packaging used by some e-commerce businesses, would increase.

“Because they will require our die-cut moulds for packaging, this will also give us with opportunities to innovate in the packaging business, enhancing packaging design and product safety, as well as improving the unboxing experience and optimising packaging for last-mile delivery,” she explained.

Published by Zack Baharum

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