KUALA LUMPUR (July 20): Nova Wellness Group Bhd, a pharmaceutical company, opened at an 18.18% or 10 sen premium over its initial public offering (IPO) price of 55 sen, on the ACE Market today.
A total of 4.08 million shares exchanged hands at the time of its official listing at 9am.
The offering drew a significant interest with an oversubscription rate of 2.84 times, with a total of 2,200 applications for 61.36 million shares received from the Malaysian public for the 16 million shares made available.
Upon listing, the company's market capitalisation is at RM174.8 million based on the enlarged share capital of 317.7 million shares.
At the issue price of 55 sen, Nova Wellness has raised total proceeds of RM44.91 million.
The group aims to use RM16.5 million (36.6%) of its IPO proceeds for constructing a new good manufacturing practice-compliant production facility, RM11.6 million (25.7%) for research and development activities, RM5 million (11.1%) for expansion of retail market presence, and RM9.21 million (20.8%) for working capital, with the remaining RM2.6 million (5.8%) for defraying estimated listing expenses.
Nova Wellness is in the nutraceutical industry and its principal activities are development, production and sales of nutraceutical and skincare products under its house brand and OEM development.
Nutraceuticals are products derived from food sources that provide health benefits in addition to their basic nutritional value. Examples of nutraceuticals include dietary supplements, herbal supplements and functional food.
Its managing director cum chief research officer Phang Nyie Lin said the group is currently in preliminary talks with Thailand and Indonesia in its search for a business partner to market its products.
"At this moment we have six products registered in Indonesia and seven products in Thailand.
"We will start with an online business to test the market there, then we will find a sole agent to distribute the products for us.
"We will complete this (the deal) in the next two years," he told reporters after the group listing ceremony here today.
In terms of its expansion plan, Nyie Lin said the group will increase its distribution network across Malaysia for their house brand products and subsequently move into Southeast Asia countries besides Thailand and Indonesia.
"Once we complete the whole range of more than 30 products, we will go into Southeast Asia countries and hope to achieve this in the next two years also," he added.
Currently, the group has developed 45 dietary supplements, 11 functional food products and 24 skincare products that are sold locally and overseas under several house brands.
Under OEM services, Nova Wellness said it currently manufactures 72 dietary supplements and two functional food products under OEM brands.
For its full financial year ended June 30, 2017 (FY17), Nova Wellness posted a net profit of RM13.71 million on the back of RM24.51 million revenue.
The group's business was co-founded by Nyie Lin and his wife Tan Sok Mooi.
The couple own the company now with their three sons, namely Phang Yeen Nung, Phang Yeen Aun and Phang Yeen Hung.
Nyie Lin and his sons own a 6.8% stake each in the company, while Tan owns the remaining 72.8% in Nova Wellness.
Post listing, Nyie Lin and his sons' shareholdings will be diluted to 5.1% each, while Tan's shareholding will be diluted to 53.9%.