by SULHI KHALID/ pic www.i-stone.com.my
I-STONE Group Bhd’s share price rose 56% or nine sen on its maiden trading day in the ACE Market of Bursa Malaysia, banking on the country’s move towards automation and Industry 4.0 to boost its prospects.
The Johor-based company’s shares opened higher at 25 sen and closed at 24.5 sen apiece yesterday from the issuance price of 16 sen, valuing the manufacturing automation provider at RM195 million.
The group’s initial public offering (IPO) has been oversubscribed by 11.56 times. The rise was considered good in a market struggling to find a strong footing.
i-Stone is involved in manufacturing automation, offering design, manufacturing and modification services of specialised automation machines, as well as provision of data management systems (DMS).
Its core business is complemented by machining fabrication and distribution of manufacturing automation software and hardware, such as robotic arms.
One United Equity Sdn Bhd is the largest shareholder of the company with a 27% stake, followed by i-Stone ED Chan Kok San with 20.3% and i-Stone ED Chin Chung Lek with a 7.4% stake. Its MD Rebecca Tee Sook Sing holds a 5.5% stake the firm.
i-Stone is hoping to raise RM39.1 million from its IPO. The company plans to use RM13.5 million from the capital raising exercise to repay borrowings, and RM6.8 million will be used for the construction of its design and development centre.
According to a research report by Rakuten Trade Sdn Bhd, the group has over 100 active clients from various industries such as consumer electronics, automotive, robotics and semiconductor — reinforcing i-Stone’s capabilities on the diverse industries of automation expertise.
Among the major clients for the group is British household electrical appliances firm Dyson Ltd.
Dyson has contributed more than 65% in sales for the group. Other top renowned clients include VS Group and ATA Industrial (M) Sdn Bhd.
“As a strategy to enhance its competency, increasing productivity and efficiency, 10.7% or RM4.2 million of the IPO proceeds will be utilised for process and product development.
“The new products and features in the pipeline are, namely, (a) deep learning system for vision inspection machines, i-FCT (automated joint-test system) and i-MES (advanced DMS),” the research house said.
To date, the group has unbilled purchase orders of RM25 million.
Rakuten Trade has placed a ‘Buy’ call for i-Stone, with a target price of RM0.21 per share.
“Given i-Stone’s expertise on customised automation machines from various industries, we expect earnings growth to be driven by higher adoption of manufacturing automation, tapping on the government’s Industry 4.0 initiatives,” it said.