Hock Heng expects RM30 mil order book to increase

KUALA LUMPUR: Hock Heng Stone Industries Bhd's order book, which currently stands at RM30 million, is expected to increase as the company has submitted bids worth RM50 million to supply dimension stones for several property projects.

The dimension stones manufacturer, en route to a listing on Bursa Malaysia's Main Market on March 26, is confident that it has good chances of winning the projects, said executive chairman and managing director Low Kim Hock.

"We have the capability to supply the product for high-end condominiums and office projects," he told reporters after the company's prospectus launch here on March 8.

Hock Heng's initial public offering (IPO) involves the public issue of 15.342 million new ordinary shares and 14.258 million offer-for-sale shares at an IPO price of 55 sen each.

The IPO is expected to raise RM8.438 million for Hock Heng and RM7.842 million for the vendors. The IPO application will close on March 16.

Low said that Hock Heng would allocate RM2.1 million from the IPO to fund the purchase of machineries and land clearing of quarry in Tangkak, Johor.

The quarry has deposits of granite with about 88,500 cubic metres of stone reserves that are expected to last until 2035, he said.

"The quarry is expected to contribute 13% or RM10 million to revenue in the next financial year 2011," he added.

Low said Hock Heng planned to enter the export market next year, targeting countries like Singapore, Indonesia, China and Vietnam, adding that the company was in the process of hiring more sales representatives.

According to him, the industry is expected to enjoy rising long-term demand for dimension stones due to the expanding population and increasing commercial building, luxury home and condominium projects.

"The dimension stones industry in Malaysia was estimated to be worth RM220.4 million in 2008," he said, citing Dun & Bradstreet's market research and adding that the company commanded about 22.5% market share.

The listing of Hock Heng will allow the company to access the capital market and raise capital to fund future growth and market expansion, said Teoh Cheng Soon, chief executive officer of Public Investment Bank Bhd, which is the adviser, underwriter and sole placement agent for the IPO.

"The IPO provides an opportunity to the general public to invest in an established company that operates in the dimension stones industry and participate in the continuing growth and success," he said. -- Bernama