At its prospectus launch yesterday, it stated its aim to double revenue by 2013 from the RM41.86 million registered for the year ended January 31 this year. This is indeed an aggressive expansion plan.
Over the next three years, it aims to almost quadruple its production capacity to more than 1.65 billion pieces of gloves, from 420 million pieces currently.
The expansion will be done in three phases namely , commissioning in first quarter 2011, third quarter 2010 as well as third quarter 2013.Along with its exponential jump in capacity,Careplus is confident that its output will easily be absorbed by an expanding global market.
Its CEO,Lim Kwee Shyan explains it this way.
"First of all, we are a very small player, with less than 1 per cent market share. So, even if we double up (our capacity), it wouldn't even touch 2 per cent. So, I believe there will be a market that we could undertake to support our increasing capacity,"
Lim added that in terms of doubling or tripling the company's supply to the global market, it is still a very small portion in the total gloves requirement.
"The global gloves market is expected to grow at a 8 per cent to 10 per cent rate annually, so that 8 per cent to 10 per cent growth is a very huge quantity."So that itself will give a big room for a player like us," he said.
The company aims to raise about RM15 million from the initial public offering exercise, involving the public issue of 65.05 million new shares of 10 sen each at 23 sen a share.
Of the 65.05 million shares, 10.5 million will be available for public application and 15.65 million for application by directors, employees and business associates. The remaining 38.9 million will be reserved for placement to selected investors.The proceeds will be used to expand Careplus' production capacity, which includes buying machinery and equipment for production lines.
"In terms of having the economies of scale, we need to go into that expansion phase. We cannot get the cost efficiency if we work on one or two production lines," Lim added.
Currently, the firm produces only natural rubber gloves. The commissioning of the new production line next year will allow it to also produce nitrile gloves.
"We are focused more on latex gloves and will eventually start production of nitrile gloves, in line with our expansion. This new investment has given us an opportunity to grow, which we have not been able to do so over the past five to six years.
"With our strong customer base, I believe that it is possible for us to achieve growth and attract newer customers in future," non-executive chairman Peter Yew explained.
The firm is expected to be listed on the ACE Market on December 6.
So, what do you think its opening price will be like?. You know, the market is always right...
2 comments:
Would you buy these IPO? It is one of the hottest IPO this year~
The hottest IPO was Petronas Chemicals. Very few people got the share.
As for Careplus, the only downside is whether it has a consistent supply of latex for it to use. If there is a steady supply that it can achieve its manufacturing targets.
Moreover the yearly growth for rubber gloves is 8%
As for the IPO price at 23 sen, I think it is okay. I do not expect too much problem with the opening price since there are market leaders to benchmark against particularly Top glove and Supermax.
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