Friday, March 31, 2017

Eversafe Rubber Berhad

IPO (Rating 2.75 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
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%)

Fundamental
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%)

Conclusion
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 %

Conclusions
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)
Copyright@http://lchipo.blogspot.com/

Date
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

Fundamental
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%

Conclusion
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.

Conclusions
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