‘Many to investors who are looking forward to this fresh milk stock?’
Farm Fresh Bhd has set an initial public offering (IPO) price of RM1.35 per share in an effort to raise RM1 billion in capital.
The dairy product manufacturer said after listing on March 22, it is expected to have a market capitalization of RM2.5 billion.
According to calculations, the IPO price is the largest price setting in Malaysia since June 2021, involving a sale offer of up to 520.2 million existing shares and a public issue of 223 million new shares.
Farm Fresh also added that it has gained the support of several core investors including:
Affin Hwang Asset Management
AIA
Franklin Templeton Asset Management (Malaysia)
Great Eastern Life Assurance (Malaysia)
Hong Leong Asset Management
JPMorgan Asset Management (Singapore)
KAF Investment Funds
Kenanga Investors
Retirement Fund (Incorporated)
Lembaga Tabung Haji
It accounts for about 80% of the institutional offering share under its IPO.
In addition, Farm Fresh stated that RM301 million from the IPO proceeds will be used to build manufacturing hubs, dairy farms and integrated processing facilities in Malaysia to expand production in Australia as well as regional expansion.
Meanwhile, Farm Fresh's financial report for 2021 recorded a profit after tax of RM36.2 million.
It increased at a compounded annual growth rate (CAGR) of 14.9% compared to an after -tax profit of RM27.4 million in financial year 2019.
In addition, it is also targeting a dividend payment of 25% of its annual turnover.
For the record, in the first 9 months of 2021, Farm Fresh was the 2nd largest producer in the ready-to-drink milk category with 18% market share.
It is also the leader with a 41% market share in the ready-to-drink cold milk segment and the 3rd largest in the yogurt category.
