Econframe makes sturdy debut on ACE Market, closes at 37 sen

KUALA LUMPUR: Total door systems solution provider Econframe Bhd (Econframe) made its debut on Bursa Malaysia’s ACE Market today at 34.5 sen compared with its initial public offering (IPO) price of 28 sen. At the opening bell, the company saw 15.71 million of its shares traded.

The stock closed at 37 sen on volume of 294.5 million shares.

Econframe Group managing director Lim Chin Horng said the company aims to raise RM18.20 million from the IPO, of which RM5 million would be allocated for land acquisition and construction of a new manufacturing facility to streamline production and RM4 million for manufacturing automation.

“Another RM6.2 million will be for working capital needs and the remaining RM3 million for estimated listing expenses,” he told a virtual press conference.

Lim said the company foresees more property launches to follow through as major property developers continue to introduce new property projects.

“Our growth will continue to be driven by the fire-resistant door sets, ironmongery, and wooden doors segments, while being supported by steady demand in the metal door frames segment,” he said, adding that the company’s order stood at RM47.01 million.

Moving forward he said the reimplementation of the conditional movement control order does not hampered the company’s operations as the demand and progress of delivery will continue until next year.

Since its establishment in 2001, Econframe has supplied its products to notable property developers, including Eco World, Sime Darby, SP Setia, Gamuda, and IJM Land.

Meanwhile, Rakuten Trade Sdn Bhd, in a research note, said with Econframe’s business expansion in place, it expects earnings trajectory to continue to be supported by enhancement in operational efficiencies and robust order book.

Head of research Kenny Yee said currently, the company’s manufacturing of wooden door products is outsourced, and the segment contributed 9.9% to total revenue.

“Leveraging the capabilities in manufacturing of fire resistant doors, the in-house production of wooden doors will set to enhance profitability due to better cost management and reduce dependency on suppliers.

“The group targets to commence the wooden doors production by the fourth quarter of 2020, utilising existing machines for the fire-resistant door manufacturing line,” she said.

Econframe recorded a net profit of RM5.34 million for the financial year ended Aug 31, 2020. – Bernama