Latest news with #PanMerchant
The Star
26-06-2025
- Business
- The Star
Pan Merchant maintains plans for global growth
Pan Merchant Bhd executive director Wong Nyeon Thiat. KUALA LUMPUR: Despite ongoing geopolitical tensions, Pan Merchant Bhd, a provider of solid-liquid filtration solutions, says its international expansion plans remain on track, particularly in the US and European markets, as its core business remains stable and resilient. The company's executive director Wong Nyeon Thiat said the company does not see any significant impact from the uncertainty as the business has remained consistently stable. 'The other industries that we are looking at are the renewable energies, where used cooking oil or used oil is refined for further processing into sustainable aviation fuel. We see potential growth in these areas. 'In Europe and the United States, this industry is a growing because it is very much policy-regulated. With countries adopting all renewable energy, a lot of these projects are coming on stream again,' Wong told a press conference in conjunction with its listing ceremony yesterday. At 9am, the company made its debut on the ACE Market at 23.5 sen, a 3.5 sen discount over its initial public offering price of 27 sen, with 187,600 shares traded. Various factors, including the conflicts, policy uncertainty, and tariffs affected the opening price, Wong said. 'But we believe the market will soon recognise Pan Merchant's long-term potential and this will be reflected in our share price,' she said. On the effects of US tariff on the company, managing director Wong Voon Ten said the impact so far has been insignificant because most of its revenue is from Malaysia. 'We typically compete with European peers. So the net effect is only about 4%, which is very manageable for us, especially since we enjoy strong margins on our products entering the US market. 'We produce quality equipment at competitive Malaysian and Asian price levels, which gives us a healthy margin in the United States,' he said. The company said, as of May 6, its order book was worth RM69.6mil, comprising orders for filtration equipment, replacement parts, and steel works, which are expected to be fulfilled within the next 12 months. Wong said the order book comprises three segments, edible oil, sustainable fuel, and water, with the company planning to grow other sectors, with a particular focus on water as its main area of expansion. 'Over the next one or two quarters, we are looking at several promising projects, both locally and across Asia Pacific. We are moving into mining as well, and one recent initiative is our participation in mining exhibitions, such as in Kazakhstan, where we see strong potential,' he added. The company believes mining activity will continue to grow in Central Asia, while Kazakhstan, Australia, and Indonesia already have significant mining operations. It is making efforts to enter and expand in these markets. — Bernama
The Sun
26-06-2025
- Business
- The Sun
Pan Merchant sees opportunities in wastewater treatment, sustainable fuel sectors
PETALING JAYA: ACE Market newcomer Pan Merchant Bhd, a provider of solid-liquid filtration solutions, is prioritising emerging industries such as wastewater treatment and sustainable fuel to drive business growth and expand untapped markets. Managing director Wong Voon Ten said the company sees rising demand for sustainable fuel solutions from major energy players, driven by the global push towards decarbonisation and cleaner energy sources. 'In Malaysia and across the Asia-Pacific region, we also see significant opportunities in water treatment projects, especially as governments and water service providers continue to increase capital expenditure to upgrade water infrastructure. 'On top of that, we are actively tendering for projects to sustain our earnings growth. 'Currently, our tender book has grown to a substantial level, with more than half derived from the potable water and wastewater treatment industry, while the remainder comprises projects from edible oil, sustainable fuel, and other industries,' he said at the company's listing ceremony on Bursa Malaysia in Kuala Lumpur today. Wong said the company remains committed to its core strength in the edible oil industry. 'As a trusted and irreplaceable partner to our end-users, we are recognised for our consistent quality and reliability, and we will continue to play a vital role in supporting refineries and processing operations. We are also focused on expanding our presence in strategic regions where edible oil production is critical,' he added. Wong emphasised the significant potential and growing demand for solid-liquid filtration solutions in the water treatment and sustainable fuel industries, expressing confidence in the group's ability to secure projects in such industries, backed by its 38-year track record of product quality and reliability. As of April 30, the group's potential project pipeline spans key industries, with the largest portion coming from the potable water and wastewater treatment segment, followed by projects in edible oil, sustainable fuel, mining, food processing, and other industrial segments. Pan Merchant's share price opened at 23.5 sen compared to the initial price offering (IPO) price of 27 sen per share. It closed at 23 sen, 4 sen or 14.8% below the IPO price, on 5.576 million shares traded. The company's IPO entailed a public issue of 232.2 million new shares and an 18 million offer-for-sale shares, at an issue price of 27 sen per share, representing 27.3% of the enlarged share capital. The overall value of the IPO is RM67.6 million, with Pan Merchant receiving RM62.7 million and the offeror receiving the remaining RM4.9 million. Out of the total proceeds of RM62.7 million, RM28 million will be used for capital expenditure on manufacturing plants, including the acquisition of machinery, equipment, and tools, as well as the renovation of its manufacturing facilities. A further RM7 million will be allocated for product development, and the remaining RM27.7 million for business expansion, working capital, and defraying of listing expenses. Pan Merchant plans to use part of its IPO proceeds to acquire advanced computer numerical control and robotic welding machines, which are expected to enhance production efficiency, to meet the growing demand for filtration equipment and replacement parts both locally and internationally. As of May 6, the group's order book stood at RM69.6 million, comprising orders for filtration equipment, replacement parts, and steel works. The order book is expected to be fulfilled within the next 12 months. Affin Hwang Investment Bank Bhd serves as the principal adviser, sponsor, sole placement agent, and sole underwriter for Pan Merchant's IPO exercise.
New Straits Times
25-06-2025
- Business
- New Straits Times
Pan Merchant's IPO price demands more than the business can deliver?
KUALA LUMPUR: Pan Merchant Bhd, a manufacturer of industrial filtration equipment, is set to debut on the ACE Market of Bursa Malaysia tomorrow (Thursday). While the company touts its international presence - with exports spanning Asia, Europe, the Americas, and Africa - its fundamentals suggest that the initial public offering (IPO) price of 27 sen per share may be overly ambitious relative to its current business capacity. Two broking houses have already raised red flags. TA Securities values the stock at 23 sen, while Public Investment Bank Bhd pegs fair value at 25 sen - both below the IPO price. Their concern? The company's price-to-earnings (P/E) ratio, which at listing works out to over 32 times based on its 2024 earnings of 0.84 sen per share. Industry observers said it is steep for an industrial manufacturer in a low-growth sector, far above the 12x to 15x P/E multiples typically seen for similar businesses in Malaysia. Analysts have chimed in to say that despite its global footprint, Pan Merchant's growth story lacks the kind of clarity and ambition that would typically justify such a lofty valuation. They added that while the proceeds from the IPO will fund automation, new machinery and working capital, the company's business plan - as outlined in its prospectus - is largely incremental. "There are no major contract wins announced, no breakthrough technologies unveiled and no concrete roadmap to significantly lift margins or scale into higher-value markets," a merchant banker familiar with the company said. The company positions itself as a niche player supplying filtration components to industries such as edible oil refining, food processing, sustainable fuel production, water and wastewater treatment, and mining. "While these sectors offer steady demand, they are generally mature and cost-sensitive, with limited pricing power. "Without a visible innovation pipeline or a move into adjacent verticals with stronger margins, earnings may continue to follow the modest trend seen in recent years," the merchant banker added. Industry observers said while management highlights plans for international expansion and improved capacity utilisation, those projections remain broad and largely untested. There is limited visibility on customer growth and even less clarity on how Pan Merchant plans to defend or expand its market share in a competitive landscape, particularly against regional players with greater scale and established networks. Another concern, said an analyst in a bank-based broking house, is the company's emphasis on international presence without a corresponding scale in revenue. While Pan Merchant exports more than 80 per cent of its products to markets across Asia, Europe, the Americas and Africa, its overall revenue base remains modest, and current earnings do not yet reflect the kind of scale or momentum typically seen in established global industrial suppliers. The broad consensus appears to be that, in short, investors are being asked to pay a premium price today for a performance that may or may not materialise tomorrow. With a small net profit base and a low barrier to entry in its segment, Pan Merchant's premium P/E valuation looks like a case of pricing in future growth without strong supporting evidence. Unless the company can meaningfully accelerate its earnings - through aggressive expansion, product innovation or strategic partnerships - the IPO price may prove overly optimistic. At the very least, it's a valuation that reflects more hope than hard numbers.
Malaysian Reserve
23-06-2025
- Business
- Malaysian Reserve
Pan Merchant's retail IPO tranche undersubscribed at 0.37 times
PAN Merchant Berhad's initial public offering (IPO) was undersubscribed by the Malaysian public, with the public portion receiving applications for only 16.93 million new shares out of 45.8 million shares offered, representing a subscription rate of 0.37 times, the company said in a Bursa Malaysia filing today. Under the public category, the Bumiputera portion was subscribed at 0.19 times, while the remaining public portion registered a 0.55 times subscription rate. Despite the undersubscription in the retail tranche, Pan Merchant said its IPO has been completed successfully due to strong support from private placement investors. The private placement to selected investors and to identified Bumiputera investors approved by MITI were both fully placed out. Additionally, the 18.3 million new shares allocated to eligible directors, employees and persons who have contributed to the success of the group were fully subscribed following clawback and reallocation. Pan Merchant's shares are slated to be listed on the ACE Market of Bursa Malaysia on July 1, 2025. Commenting on the market conditions, CEO Lim Teck Seong said: 'We acknowledge the market sentiment remains selective, especially among retail investors, but we remain confident in our fundamentals and long-term growth strategy.' He added: 'The full take-up by institutional investors and strategic shareholders is a strong vote of confidence in our business model and prospects.' Pan Merchant, a construction and project management services provider, is seeking to raise RM23.4 million from the IPO to fund working capital, repayment of bank borrowings, and listing expenses. — TMR
The Star
23-06-2025
- Business
- The Star
Pan Merchant eyes global growth beyond edible oil
PETALING JAYA: Having made inroads into high-growth sectors such as sustainable fuel, water treatment, and mining, ACE Market-bound Pan Merchant Bhd is now gearing up to scale its operations in its efforts to capture a larger share of global market share. Pan Merchant Bhd executive director Wong Voon Yoong said while the edible oil industry has long been the company's 'bread and butter', the solid liquid filtration specialist is looking to expand its presence in sectors like water treatment and mining. 'Water is the immediate sector that we are already putting a lot of focus into. Many projects are coming up, both locally and overseas, and the contract values are quite high,' he told StarBiz. Almost 90% of Pan Merchant's total revenue last year was derived from the edible oil segment. For the water division, the company's filter presses are used to remove impurities from potable water before further treatment into drinkable water, as well as to filter sludge from wastewater before it is reused or safely discharged. Voon Yoong also highlighted mining as a promising growth area, given the sector's substantial market size. 'If you look at edible oil, it accounts for only about 5.8% of the global filtration market. However, the mining sector makes up roughly about 22%, which is about three and a half times larger than the edible oil industry. 'Together, the water and mining sectors make up about 50% of the global filtration market,' he said. Voon Yoong said that over the past few years, Pan Merchant has supplied filters for smaller mining applications, such as clay processing. 'Mining is a very big industry which can involve small, medium or even very large filters due to the sheer volume of water that needs to be filtered. 'In some parts of the industry where the filters needed are not too big, we are already able to cater to those needs – for example, clay, which we have been involved in about 10 to 20 years ago,' he said. Meanwhile, executive director Wong Nyeon Thiat said the group currently holds a global market share of just 0.5% and is aiming to increase this to between 2% and 3% over the next two to three years. 'Getting to 2% to 3% is very substantial and a lot of work needs to be put in,' she said. Pan Merchant aims to raise RM67.6 mil from its public issuance via an initial public offering (IPO) on the ACE Market of Bursa Malaysia on June 26. The group will issue 232.19 million new ordinary shares at 27 sen apiece. The IPO pricing is based on a 32.14 times price-earnings ratio, benchmarked against Pan Merchant's financial year ended Dec 31, 2024 (FY24), and values the company at an estimated market capitalisation of RM247.32mil upon listing. For the offer-for-sale portion, only substantial shareholder Budhi Sentoso Rachmat will be disposing of his shares via private placement to selected investors. According to the prospectus, Budhi is offering 18 million existing Pan Merchant shares for sale. No other members of management or shareholders are participating in the share sale during the IPO. Of the targeted RM67.6mil in IPO proceeds, RM62.7mil will be go to Pan Merchant, while the balance RM4.9mil will go to Budhi. The group aims to maintain a dividend payout ratio of no less than 30% of its profit after taxation attributable to owners of the company for each financial year. About RM7mil of the IPO proceeds is earmarked for product development, including the creation of a prototype filter customised for the mining industry by the end of next year. Other key initiatives include developing complementary equipment like slurry thickeners, cake discharge mechanisms, and conveyor systems, as well as modular filters for easier international shipment. Pan Merchant also plans to produce replacement parts in-house to gain greater design control, establish a mobile filtration test centre, and hire two engineers specialising in the mining sector. The bulk of the proceeds, or RM28mil, will fund the company's capital expenditure, including enhancing its manufacturing capabilities by acquiring new machinery, equipment and tools, along with renovating its manufacturing plants. Pan Merchant operates three facilities in Ipoh, Perak: Jelapang Plant 1, Jelapang Plant 2, and Lahat Plant, with the majority of its products exported to Asia, Europe, the Americas and Africa. Pan Merchant also plans to intensify its sales and marketing activities in the region by participating in international exhibitions across Europe and America, and updating its website and marketing materials. Managing director Wong Voon Ten noted that the group intends to set up an additional filter leaf production line at Jelapang Plant 1, along with new automated machineries, equipment and tools. These upgrades aims to improve consistency in producing quality filters, reduce manpower requirement, and cut down on outsourcing. Additionally, the group is adding a second filter leaf production line at its Netherlands office as part of a broader RM6mil expansion plan, which also includes renovating and expanding its office and workshop space there. 'The filter leaves are spare parts that our customers need to change periodically due to wear and tear.' 'This generates a recurring source of income for the group,' Voon Ten added. Over the years, the number of filters sold has increased, leading to a larger installed base. 'With our current production capacity, it is not that we are unable to cope with demand – but delivery times can become too long at times,' he noted. He said with the new production lines, the group will be better able to handle rising demand and shorten delivery times, especially for urgent replacement orders. Pan Merchant also aims to increase automation of key processes at its facilities by acquiring and installing new machinery. At present, about 80% of its production processes still rely on manual labour. While Nyeon Thiat noted that certain assembly processes are irreplaceable and some manual labour will still be needed, she said the company targets to reduce manual labour from 80% to around 30% to 40%. The remaining IPO proceeds will be allocated to working capital (RM14.69mil) and estimated listing expenses (RM7mil). Affin Hwang Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO.
