Crown Asia Chemicals Corp. share price surged by nearly 50 percent on its trading debut Monday as investors that were left out during its P222.78-million initial public offering this month snapped up shares as they hit the market.
Crown Asia, which listed under the symbol “CROWN” and is the first company to go public this year, ended yesterday’s session up 49.65 percent to P2.11 per share. That translates to an additional P442 million gain in its market value to end the session at P1.33 billion.
The company, which manufactures plastic compounds and pipes, was established 25 years ago. Many investors are seeing this as a new play on the country’s robust construction sector. Crown Asia said its products were also being used in the telecommunications sector.
“Given pent-up demand and compared to other companies that are relatively expensive at this point, many investors decided to ride on the momentum of the stock,” Astro del Castillo, First Grade Finance Inc. managing director, said in an interview.
Manny Ocampo, director-corporate finance of Abacus Capital & Investment Corp., said the IPO was more than three times oversubscribed for the underwriter’s allocation, which accounted for about 70 percent of the offer.
Del Castillo noted that Crown Asia also decided to go public amid positive sentiments on Philippine equities and the country’s broader economic prospects.
“The bulls are alive as it listed,” Del Castillo said. Data from the PSE showed that a total of 10.85 million Crown Asia shares valued at P22.91 million changed hands Monday.
“The company’s primary businesses, whether it be the compounds business or the pipes, are really an enabler, a catalyst for the Philippine economy in general,” PSE chief operating officer Roel A. Refran said during the company’s trading debut.
Crown Asia’s public float stood at 25 percent, post-IPO. It is headed by the Perez and Villanueva families, who will own about 74.95 percent of the company after the IPO, the prospectus showed. The company raised fresh money for its expansion and to pay down debts.
Specifically, Crown Asia said P66.2 million of the IPO proceeds would go to the construction of a new PP-R and HDPE manufacturing plant and another P43.8 million to retire debt. It said another P25 million will be used for the modernization of existing compounds and pipes plants and another P68.9 million for working capital purposes. Miguel R. Camus