KUALA LUMPUR:  Malaysia's second largest cleanroom gloves exporter, CE Technology Bhd made its debut on the Leading Entrepreneur Accelerator Platform Market on Friday, opening at 26 sen, or two sen above its offer price of 24 sen.

At midday, it was up five sen to 29 sen.

Under the listing exercise, it raised RM12.48mil to mainly finance its expansion due to the strong global demand for cleanroom gloves. 

It placed out 52 million shares representing 15.02% of the company's enlarged share capital to selected sophisticated investors at 24 sen per share, raising a total of RM12.48 million.

Upon listing, CE Technology will have a market capitalisation of RM83.10mil.

The company manufactures and sells customised nitrile and latex cleanroom gloves as an original equipment manufacturer.

The cleanroom gloves are targeted for niche markets such as the high-end electronics and life sciences industries which require additional chemical and microbiological hazard protection. Cleanroom gloves are also mainly used to control contamination and prevent electrostatic discharge.

At the listing ceremony, managing director and CEO Teoh Swee Sun, said: “Since our inception in 2002, we have made huge strides in overcoming various challenges to emerge as the second largest exporter of cleanroom gloves in Malaysia, commanding a 11.7% market share in 2018. 

“Furthermore, the future prospects of this industry are positive due to expected expansion in various end-user industries.” 

Teoh pointed out global semiconductor industry growth was expected to be driven by derived demand from the manufacture of smartphone and tablets and from electronic components of the automotive industry.

Similarly, the global pharmaceutical industry is expected to continue expanding for the next couple of years, supported by ageing populations, the rise of chronic diseases and advancements of innovative treatments, he added.

“Besides that, our industry is characterised by constant technological changes and evolving industry standards. As such, our company’s long-term strategy involves introduction of new and innovative solutions to our customers in various industries through our own in-house R&D department.

“Our R&D team is also dedicated to improving our existing products to ensure that our products remain relevant to the requirements and preferences of our customers,” it said.

Teoh said CE Technology would use part of the proceeds to set up  two new cleanroom post-processing facilities as well as to purchase additional equipment and upgrade the R&D facilities.

“Our capacity expansion initiatives are well underway. We recently completed the installation of our third dipping line, which was funded by internal funds and bank borrowings. With the new dipping line, our dipping capacity has increased from 18 million pieces to 27 million pieces of raw nitrile gloves per month.

“As for the new cleanroom post-processing facilities, installation works are expected to complete by the end of second quarter of 2019. Upon which, our cleanroom post-processing capacity will more than double from 20 million pieces to 43 million pieces of gloves per month,” he said.

CE Technology said its  strategy would be to broaden our product range and market presence in the overseas markets. 

In terms of product development, Teoh recently launched new types of cleanroom gloves that are more value-added as a result of successful efforts from its in-house R&D.

“This has garnered encouraging response which we believe will contribute positively to our Company’s financial performance in the near future, and we shall continue to build on this positive momentum.”

“In addition, we target to set up a marketing office in Europe to expand our market reach in the region. By being able to serve more customers in the region and understand their needs better, we would be able to leverage on our R&D capabilities to develop products that cater directly to their unique specifications,” he said.

For its first half ended Jan 31, 2019 revenue grew 10.9% year-on-year to RM23.89mil from RM21.55mil a year ago.

Gross profit margin improved to 24.9% from 21.3% in the previous corresponding period while profit after tax more than doubled to RM3.32mil against RM1.59mil a year ago. 

“The improved performance was mainly attributed to the contribution of the new type of high-end cleanroom gloves, which commands higher selling price and profit margin, as well as the strengthening of US Dollar against the ringgit.”

Mercury Securities Sdn Bhd is the approved adviser, placement agent, custodian and continuing adviser for the company and listing on the LEAP Market of Bursa Securities.