Friday, March 31, 2017

Eversafe Rubber Berhad

IPO (Rating 2.75 star out of 5.0)

Open to apply: 31/03/2017
Close to apply: 10/04/2017
Listing date: 21/04/2017

Core Business
Business: Masterbatch, Manufacturing of Tyre retreaders, rubber material traders, rubber works.

Revenue (260 Customer)
MasterBatch:89.3% (Pre-cured tread liner, camelback & others)
Local: 45% (2015: 22% of local market shares), 2016 (43%)
Export (23 countries): 55% (2015), 57% (2016)

Major Customer
Kohshin Retread (Japan): 9.346mil (17%)

Market: Ace Market
Price: RM0.36 (Promoter & director average cost per shares: RM0.25)
EPS: RM0.031 (9mths, 1yr forecast 0.041)
P/E:  8.78 (based on forecast eps 1yr 0.041)
Cash & fixed deposit after IPO: RM0.0515 per shares
NA after IPO: RM0.28
Debt ratio after IPO: 0.27 (Debt: 25.431mil, Asset:92.952mil, Current asset: 50.056mil)
Dividend policy: 40%-60% of PAT

Financial Ratio
Trade Receiveables turover: 111.1 days
Trade Payable Turnover: 31.3 days
Inventory Turnover: 102.3 days
Current Ratio: 2.5
Gearing Ratio: 0.3
ROE: 10.09%

Cost (2016)
Materials: 75.5%
Labour cost: 9.2%
Overheads: 15.3%

Past Financial Proformance (Revenue)
2016 (9mths): RM 55.066 mil (eps: 0.031)
2015: RM75.297 mil (eps: 0.024)
2014: RM81.387 mil (eps: 0.022)
2013: RM80.816 mil (eps: 0.027)

Net Profit Margin
2016: 13.52%
2015:  7.74%
2014:  6.53%
2013:  8.11%

After IPO Sharesholding
Eu Ah Seng: 10.28%
Tai Hin & Son PG Sdn Bhd: 48.59%
Dato' Seri Cheah (51.35% on Tai Hin)
Cheah Familiy (48.65%)

Director Remuneration (from gross profit 2015)
Tan Sri Dato' Dr.Sak Cheng Lum: RM50k
Dato' Seri Cheah RM300k-350k
Eu Ah Seng: RM250k-300k
Cheah Siang Tee: RM300k-350k
Cheah Eu Lee: RM50k
Tuan Haji Mohd Isa Bin Talib: RM50k
Ng Meng Kwai: RM50k
Ong Beow Chieh: RM50k
Total director from Gross profit RM0.85mil (4.93%) to RM1.25mil (7.25%)

Use of fund
New Manufacturing Lines & autonation system: 12.580mil (72.8%)
IPR & overseas brading: 1.5mil (8.7%)
Listing Expenses: 3.2mil (18.5%)

Good thing is:
1. Big portion of IPO fund use to expand business
2. PE still below 10
3. More than 50% is expprt, not highly depend on local market
4. Low debt
5. Have clear dividend policy

The bad things:
1. Listing on Ace market
2. Director might too many & diretor fee is expensive
3. ROE% only 10%, Net profit margin might not attractive.
4. Lisitng expenses is unaccetable expensive in %

We see the intention of the IPO is to grow the business bigger. It should be a fair deal.

IPO Price: RM0.36
Good time: 0.53 (PE13)
Bad time: 0.245 (PE6) 

Wednesday, March 8, 2017

Eco World International Berhad

IPO (Rating 1.25 star out of 5.0)

Open to apply: 09/03/2017
Close to apply: 21/03/2017
Listing date: 03/04/2017

IPO Issue
2 bonus of EWI warrant for every 5 EWI shares held after IPO.
Final price might lower then RM1.20 if final institution price lower than RM1.20

Warrant Detail
Unit: 960 mil warrant
Tunere: 5 year to expire
Excersive Price: 121% from the final price
***If use RM1.20 to cal, excersive price is RM1.45
***Warrant price is not same with excersice price

Core Business, Geo
Business: Real Estate / Properties
Geo: UK, Australia

On Going Project (Gross Development Value)
London City Island Phase 2: RM3,762.8 mill (handover 2018, 2019)
Embassy Gardens Phase 2, London: RM5,076.10 mil (handover 2018, 2019,2021)
Wardian London: RM3.0816 (handover 2020)
West Village, Parramatta Sydney: RM1,042.3 mil (handover 2020)
Total on going project value: RM12,962.8 mil

Market: Main Market
Price: RM1.20 (par value:RM1.00)
EPS: -RM0.967
P/E: -1.24 (PE Negative)
Cash & fixed deposit after IPO: RM0.504 per shares
NA after IPO: RM1.06
Debt ratio after IPO: 0.0162
Dividend policy: No Fixed policy of dividend

Financial Ratio
Current Ratio: 0.19
Gearing Ratio: 9.69

Past Financial Proformance (Revenue)
2016: RM0.683 (EPS -0.967)

After IPO Sharesholding
Tan Sri Liew: 10.3%
Dato' Teow: 0.6%
Tan Sri Azlan: 0.3%
Dato' Siow Kim Lun: 0.2%
Cheah Tek Kuang: 0.2%

Director Remuneration (from gross profit 2015)
Tan Sri Liew: RM4.650 mil - RM4.7 mil
Dato' Teow: RM6.050 - RM6.1 mil
Tan Sri Azlan: RM0.2 mil - RM0.25 mil
Dato' Siow Kim Lun: RM0.2 mil - RM0.25 mil
Cheah Tek Kuang: RM0.2 mil - RM0.25 mil

Use of fund
Debt Repayment: 52.9%
Settlement of Acquisition of EW Investment: 1.5%
Working Capital: 43.6%
Listing Expenses: 2%

Good thing is:
1. 2018 onward only can have harvert the investment return.
2. Have some free warrant.

The bad things:
1. Company in still in losses.
2. 52.9% IPO fund use to pay debt.
3. Minimum RM11mil director fee is very expensive.
4. Director hold too small shares in company.

The only attractive part is the handover project start from 2018 until 2021. Anything can happen from now until 2018, & our blog believe investor will have opportunities to buy below IPO price.
Hope it not like another AAX case.

IPO Price: RM1.20
After IPO price should fall below RM1.20

Friday, December 30, 2016

Serba Dinamik Holding Berhad

IPO (Rating 2.5 star out of 5.0)

Open to apply: 30/12/2016
Close to apply: 19/01/2017
Listing date: 08/02/2017

Core Business, Geo, Customers, Supplier
Business: Enginnering solution on O&G & power generation.
Geo (operating facilities): Malaysia, Indonesia, Bahrain, UAE, UK
Customer 2016: Petronas 23.14%, Sarawak shell bhd 3.36%, Energy Engineering & Services 2.53%, Energy Machine Services L.L.C 1.02%
Supplier: Technorette sdn bhd 14.38%, FRZ Scientific 10.95%, Qatar Enginerring & Construction 10.02%

Market: Main Market
Price: RM1.50 (par value:RM0.50)
Intrinsic Value: RM1.48 (forcase by 2016 EPS0.152)
EPS: RM0.152
P/E: 9.87
Cash & fixed deposit after IPO: RM0.38 per shares
NA after IPO: RM0.76
Dividend policy: at least 30% on PAT

Financial Ratio
Trade Receivables turnover days: 95.70
Trade Payable turnover days: 70.81
Inventory turnover days: 62.82
Current Ratio: 1.25
Gearing Ratio: 0.82
Debt ratio: 0.19 (Debt: RM0.861 bil, Total Asset: RM1.885 bil)

Past Financial Proformance (Revenue)
2013: RM 536.195 mil (EPS: 0.95)
2014: RM 755.768 mil (EPS: 1.03)
2015: RM1402.942 mil (EPS: 2.52)
2016 (6 mths): RM 911.726 mil (EPS: 1.52)

After IPO Sharesholding
Hj.Abdul Kadier: 22.22%
Dato' Awang Daud: 14.17%
Dato' Karim: 28.02%

Director Remuneration (from gross profit 2015)
Hj.Abdul Kadier: RM350k-400k
Dato' Awang Daud: RM900k-950k
Dato' Karim: RM1150k-1200k
Dato' Mohamed Nor: RM150k-200k
others 3 director: RM100k-150k
***total director fee from gross profit: 1.23%-1.38%

Use of fund
Expansion of business & operation facilities: 73.69%
Working capital: 7.2%
Repayment borrowing: 14.74%
Listing expenses: 4.37%

Good thing is:
1. PE around 10
2. Intrinsic value is near to IPO price (earning power).
3. Debt ratio still acceptable.
4. Revenue still growing.

The bad things:
1. O&G still industry still very depend on the crude oil price.
2. Receiveable turnover days quite high.
3. Director fee is look lower in percetage but the amount pay out is very heavy if they unable to sustain their revenue.
4. 14.74% IPO use to pay debt.

The timing of IPO might not the best for the company since crude oil price still in low level. Might not able to provide good return in short-term.

IPO Price at RM1.50 (PE9.87)
Good time : RM1.82 (PE12)
Bad time : RM0.76 (PE5)

KIP Real Estate Investment Trust

IPO (Rating 2.5 star out of 5.0)

Open to apply: 30/12/2016
Close to apply: 16/01/2017
Listing date: 06/02/2017

Core Business
Business: Rental income (KIP Mall)
Consumer group (5km radius from properties): Lower to middle (6 malls), Middle (KIP Mall,Bangi).

Market: Main Market
Price: RM1.00
Intrinsic Value (earning power): RM0.562 (Provided by prospectus forecast yr until 2018)
EPS: RM0.0654 (2017)
P/E: 15.29
Cash & fixed deposit after IPO: RM0.0349 per shares
NAV after IPO: RM0.98
Dividend policy: 90% income half year basic
Debt ratio: 0.151 (Debt: RM90.492 mil, Total Asset: RM597.818 mil)

Past Financial Proformance (Revenue)
2014: RM 48.304 mil (EPS: 0.0648)
2015: RM 51.632 mil (EPS: 0.0757)
2016: RM 53.006 mil (EPS: 0.0836)
Forecast year 2017: RM 36.147 mil (EPS: 0.0654)
Forecast year 2018: RM 56.069 mil (EPS: 0.0659)

Property & Occupancy
KIP Mart Tampoi : 97.3%
KIP Mart Kota Tinggi: 94.6%
KIP Mart Masai: 92.6%
KIP Mart Lavender Senawang: 72.6%
KIP Mart Melaka: 65.8%
KIP Mart Bangi:90.3%

After IPO Sharesholding
Dato' Chew Lak Seong, Dato' Ong Kook Liong: 53.7%

Manager's Management Fees (from forecast year 2017,2018 on gross profit)
2017: RM1.824 (4.18%)
2018: RM3.313 (4.90%)
***Sunreit management expenses ratio: 0.88%

Use of fund
Purchase of consideration for Aquisitions: 94.87%
Listing expenses: 4.66%
Financing Facilities: 0.47%

Good thing is:
1. Reits is a safety investment.
2. NAV value near to IPO price.
3. PE meet the minimum requirement (country PE 16.1 @23/12/2016)
4. Provide rental income from distribution.

The bad things:
1. Management fee is very expensive compare other retail Reits.
2. Doesn't provide any clear futures grow plan.

1. Attractive for those like to invest in low risk & receive dividend about 6% per year.
2. Not attractive to short-term investor.

IPO Price at RM1.00 (PE15.29)
Good time : RM0.999 (PE15)
Bad time : RM0.45 (PE7)

Tuesday, December 20, 2016

HLT Global Berhad

IPO (Rating 3.25 star out of 5.0)

Open to apply: 20/12/2016
Close to apply: 28/12/2016
Listing date: 10/01/2017

Core Business, Geo, Customers, Supplier
Business: Glove Dipping line 97.78% (design, fabrication, installation, tesing, commissioning),upgrading & modification works 1.42% & supply part 0.8%
Geo: M'sia 73.62%, Thai 25.86%, Indo 0.52%
Customer 2016 (top3): Central Medicare S/B (33.3%,6yrs), Cardinal Health 222 Thai ltd (25.8%,2yrs), Green Prospect S/B (19.1%,7yrs)
Supplier (top3): Choo Bee Hardware S/B (12.8%,7yrs), Yoshiki Solution Thai Ltd (12.7%,1yr), Yankong Stainless S/B (10%,6yr).

Market: Ace Market
Price: RM0.45 (par value:RM0.10)
Intrinsic Value: RM0.344
EPS: RM0.0235 (7mth)
P/E: 11.25 (forecast 12month EPS 0.40)
Cash & fixed deposit after IPO: RM0.095 per shares
NA after IPO: RM0.19
Dividend policy: Does not fixed any % in dividend policy

Financial Ratio
Trade Receivables turnover days: 46
Trade Payable turnover days: 129
Inventory turnover days: 18
Current Ratio: 1.98
Gearing Ratio: 0.04
Debt ratio after IPO: 0.386 (Debt: RM32.618 mil, Total Asset: RM84.411 mil)

Past Financial Proformance (Revenue)
2013: RM 46.042 mil (EPS: 0.0377)
2014: RM 43.568 mil (EPS: 0.0324)
2015: RM 75.697 mil (EPS: 0.0460)
2016: RM 47.692 mil (EPS: 0.0235) **for 7month

After IPO Sharesholding
Chan Yoke Chun: 35.09%
Wong Kok Wah: 36.52%

Director Remuneration
Wong Kok Wah: 700k-750k
Chan Yoke Chun: 700k-750k
other 2 director: 50k-100k
other 1 director: 0-50k
***total director fee from gross profit 2015: 9.85%-11.50%

Use of fund
Capital Expenditure: 50.52%
R&D expenditure: 8.42%
Working Capital: 27.59%
Listing Expenses: 13.47%
***Factory utilasation rate:84.62% (2016), 81.42% (2015), 72.73% (2014), 90.91% (2013)

Good thing is:
1. Revenue still growing & around PE11.
2. Debt ratio still healthy.
3. Co-founded WKW still remain as major sharesholder.
4. Big potion of IPO fund use to develop business (buid new factory).

The bad things:
1. listing in ACE market.
2. Price is 30% above intrinsic value.
3. Director fee is too high.

Overall is a above average IPO & near to fair IPO. Still able to see the true value of IPO. However, director fee might quite high.

IPO Price at RM0.45 (PE11.25)
Good time : RM0.60 (PE15)
Bad time : RM0.28 (PE7)

Matang Berhad

IPO (Rating  1.0 star out of 5.0)

Open to apply: 19/12/2016
Close to apply: 03/01/2017
Listing date: 17/01/2017

Core Business, Customers, Supplier
Business: Plantation estate, Sale of FFB, & Property Investment Holding.
Major Customer: Lenga Palm Industrial S/B (100%, 2016)
Supplier: Twwin Arrow Fertillizer S/B 68.2%, Nisin Bio Tech 19.4%

Market: Ace Market
Price: RM0.13 (par value:RM0.10)
Intrinsic Value: RM0.075 (forcase by 2016 EPS RM0.0009)
EPS: RM0.0009
P/E: 144.44
Cash & fixed deposit after IPO: RM0.015 per shares
NA after IPO: RM0.10
Dividend policy: Does not fixed any dividend policy

Financial Ratio
Trade Receivables turnover days: 23
Trade Payable turnover days: 27 (2015d data, 2016 no data)
Inventory turnover days: 17
Current Ratio: 17 (after IPO 29.96)
Debt ratio: 0.013 (Debt: RM2.396 mil, Total Asset: RM184.53 mil)

Past Financial Proformance (Revenue)
2013: RM 8.720 mil (EPS: 0.0011)
2014: RM 9.402 mil (EPS: 0.0011)
2015: RM 7.411 mil (EPS: 0.0010)
2016: RM 7.169 mil (EPS: 0.0009)

Platation area (by Hectares)
Less profitable trees
Replanting: 16.4 (need 5 years to mature)
1-4 years: 217.6
21-25 years: 16.4

Profitable trees
5-10 years: 244.9
11-15 years: 216.8
16-20 years: 370.0

After IPO Sharesholding
Eng Cheng Guan 0.01%
Datuk Tan Teck Poh 0.01%
Ng Keng Heng 0.05%

Director Remuneration (from gross profit 2016)
Eng Cheng Guan 50k-100k
others 11 director 0-50k
***total director fee from gross profit 2015: 1.09%-14.27%

Use of fund
Replanting: 1.5%
Capital Expenditure: 15.1%
Working Capital: 70.5%
Listing Expenses: 12.9%

Good thing is:
1.Profitable trees 76.9% (2016), the company forecast 93.3% (2017).
2. Debt is very low compare Asset

The bad things:
1. PE is too high because of EPS too low.
2. Director fees too high (14.27% from gross profit 2016) & too many directors for this company size.
3. Yearly profit is dropping.
4. Director holding % very low (major sharesholder Huaren, Rohua, MHB)

Avoid this IPO

Tuesday, December 13, 2016

FoundPac Group Berhad (FPGROUP 5277)

IPO (Rating 3.75 star out of 5.0)

Open to apply: 13/12/2016
Close to apply: 19/12/2016
Listing date: 29/12/2016

Industrial product (Core Business, Geo, Customers, Supplier)
Business: Percision engineering parts in semiconductor industry
Geo: - does not decladed
Major Customer: Broadcom Corporation 47.7% (US- having 11 years of business relationship)
Major Supplier: ADE Technologies Pte Ltd 38.26% (S'pore), Gaffoglio 6.86% (US), Innovation semicon 6.10% (US).

Market: Main Market
Price: RM0.54 (par value:RM0.10)
Intrinsic Value: RM0.4099 (forcase by 2016 EPS 0.0448)
EPS: RM0.0448
P/E: 12.054
Cash after IPO: RM0.08319  per shares
NA after IPO: RM0.16
Dividend policy: at least 30% dividend profit after tax

Financial Ratio
Trade Receivables turnover days: 61
Trade Payable turnover days: 53
Inventory turnover days: 41
Current Ratio: 9.92
Debt ratio: 0.0787 (Debt: RM5.198 mil, Total Asset: RM66.087 mil)

Past Financial Proformance (Revenue)
2014: RM 30.204 mil (EPS: 0.0256), profit margin 41.96%
2015: RM 34.370 mil (EPS: 0.0359), profit margin 46.14%
2016: RM 44.108 mil (EPS: 0.0448), profit margin 47.06%

After IPO Sharesholding
FoundPac Holdings: 64.32%
(Lee Chun Wah, Tan Sin Khoon, Ong Choon Heng)

Director Remuneration (from gross profit 2016)
Tan Cheik Eaik: RM0-50k
Lee Chun Wah: RM750k-800k
Tan Sin Khoon: RM750k-800k
Ong Choon Heng: RM350k-400k
Chan Bee Cheng: RM0-50k
Teoh Lay Fung: RM0-50k
Total director fee: 8.91%-10.12%

Use of fund
Purchase of property, plant & equipment: 37.04%
Overseas expansion: 18.52%
Working Capital: 16.66%
D&D Expenditure: 13.89%
Listing Expenses: 13.89%

Good thing is:
1. 3 years revenue, EPS, profit margin, continue perform better.
2. Have at least 30% dividend PAT policy.
3. Debt is at very minimum compare to asset.
4. Cash Flow statement showing perform better over pass 3 years.
5. IPO fund use to expend business.
6. At least having 47.7% revenue is from USD.
7. Business (Percision for semiconductor) product still in industrial growth stage.

The bad things:
1. Director fee is too expensive 8.91%-10.12%.
2. Over depend on single major customer (47.7% Broadcom Corp)
3. 31% expensive compare intrinsic value.

Is a good IPO. But the 2 major weakness is director fee too high, & over depend on one single customer.
By forecast on it growing business, it should able to perform better for coming years, since weak MYR will increase their product demand.

IPO Price at RM0.54 (PE12)
Good time : RM0.675 (PE15)
Bad time : RM0.35 (PE8)