Samurai 2K Aerosol shares soar in Catalist debut

Singapore

THE stock of spray paint maker Samurai 2K Aerosol jumped as much as 40 per cent above its initial public offering (IPO) price on the first day of trading on the Singapore Exchange's (SGX) Catalist board on Monday.

The company had placed some 100 million shares at 20 Singapore cents apiece through its IPO.

The share price shot up to 28 Singapore cents in early trading before closing the day 24.5 cents apiece, half a cent lower than the opening price of 25 cents.

Of the IPO net proceeds of about S$2.35 million, S$1.2 million will be used for the expansion of production facilities and S$1.15 million will be used for general working capital purposes.

This is the first IPO for the Singapore Exchange this year. It brought the total number of companies on the Catalist board to 186, with a combined market capitalisation of S$10 billion, SGX said on Monday.

Established in 1997, Samurai 2K is a Malaysia-based aerosol coating specialist with a focus on coating solutions for the automotive refinishing and refurbishing industry.

The company manufactures, distributes and markets its products under its own brands to customers in South-east Asian markets including Malaysia, Indonesia, Thailand and the Philippines.

Growth in the aerosol spray paint market is closely pegged to the two-wheeler population, the company had said in its prospectus. On average, a two-wheeler gets repainted every two to three years in South-east Asia for maintenance and decorative purposes. It thus estimates the total market size in the region to grow from 117.5 million cans in 2015 to 158.8 million cans in 2020.

Indonesia will be the most attractive market, as the 58 million-can market size in 2015 will expand to 83.6 million in 2020, it said.

The group reported a profit of RM5.4 million (S$1.73 million) for FY2016, up from RM1.9 million for FY2015.