Stocks to Watch: Axelum in a nutshell

MANILA, Philippines – Axelum Resources Corporation debuts on the main board of the Philippine Stock Exchange (PSE) on Monday, October 7.

What is the company about? Axelum has been around for over 30 years and manufactures coconut products – from desiccated coconut, coconut milk, coconut milk powder, and coconut cream, to coconut water, coconut oil, and basically almost every product you can get out of the fruit's shell.

Its products are exported to 23 countries, with a distribution network in countries like the United States, Australia, New Zealand, Japan, South Korea, and Taiwan.

Romeo Chan is its chairman and chief executive officer. Henry Raperoga is its president and chief operating officer.

Why is it going public? Axelum is pursuing an initial public offering (IPO) to expand its market presence and enhance its business operations in 3 to 5 years.

"We also plan to increase our market share by growing our customer base for private label brands and by introducing our house brands to additional retailers in order to gain greater scale and improve profit margins," said Raperoga.

The company plans to strengthen and widen its presence in North America, particularly in the West Coast and Canada, as well as gain market share in South America.

Part of the proceeds of the IPO will also be used to pay debt and other capital expenditure requirements.

How much per share? Axelum has reduced its IPO to P5 per share in a move to attract more investors. The shares were offered from September 24 to 30.

It also reduced the secondary offer to 100 million secondary shares.

"We decided to sell only 100 million shares instead of the initially planned 430 million shares after the final price was set as we believe Axelum is worth more than the set price of P5 per share," said Jason Rosenblatt of selling shareholder CP Compass Singapore.

The move will raise P4 billion for Axelum, coming from 700 million primary shares and 100 million secondary shares.

Previously, the company set its IPO price at P5.72 per share at an offer size of P6.5 billion. 

Market capitalization is estimated to reach P20 billion upon listing. Public float will be around 28%.

Axelum will use the trading symbol AXLM.

First Metro Investment Corporation is its issue manager, bookrunner, and joint lead underwriter. BPI Capital is also joint lead underwriter.

How are its financials? Axelum had reported impressive growth.

It was able to increase its sales 10 times in just 3 years from P464 million in 2015 to P5.9 billion in 2018.

In the 1st quarter of 2019, Axelum reported a net income of P262 million, 18% higher year-on-year. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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