Monday, June 19, 2017

Advancecon HOlding Berhad

IPO (Rating  2.25 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 19/06/2017
Close to apply: 28/06/2017
Listing date: 10/07/2017

Share Capital
Market Cap: RM253.310 mil
Public Issue: 90 mil shares (Open to public:30 mil shares)
Enlarged Issued Shares: 402.079 mil shares

Business (Construction)
Earthwork (64.2%) & Civil Enginnering (35.8%)

Major Customer
Ecoworld: 28.8%
Tropicana Group: 17.2%
Sp Setia: 13.6%

Remaining Order Book
2017: RM123.76 mil
2018: RM105.78 mil
2019: RM342.94 mil

Fundamental
Market: Main Market
Price: RM0.63
EPS: RM0.0658
P/E: 9.57
Cash & fixed deposit after IPO: RM0.087 per shares
NA after IPO: RM0.26
Debt ratio after IPO: 0.53 (Debt: 177.767 mil, Non-Current Asset: 165.864 mil, Current asset: 170.424 mil)
Dividend policy: 20% from PAT
ROE: 16.68%

Financial 
Trade Receivable: 122 days
Trade payable: 73 days
Credit for customer: RM 1.582 mil (1.2% from total trade receivable) not collected after 150days

Past Financial Proformance (Revenue)
2016: RM234.668 mil (eps: 0.0658)
2015: RM264.307 mil (eps: 0.0745)
2014: RM199.809 mil (eps: 0.0533)

Net Profit Margin
2016: 11.3%
2015: 11.3%
2014: 10.7%

After IPO Sharesholding
Dato'Phum: 23.7%
Lim Swee Chai: 12.7%
Pham Soon Kok: 7.3%
other 7 major sharesholder total: 25.9%

Director Remuneration (from gross profit 2016)
Yeoh Chong Keat: RM101k-150k
Dato'Phum: RM1.2mil-1.25mil
Lim Swee Chai: RM1mil-1.05mil
Ir. Yeo An Thai: RM700k-750k
Tung Kai Hung: RM450k-500k
Mohd Zaky bin Othman: RM50k-100k
Fathi Ridzuan bin Ahmad Fauzi: RM50k-100k
Total director remuneration from gross profit: 5.5% - 6.1%

Use of fund
Capital Expenditure: 52.4%
Repayment borrowing: 22%
Working Capital: 18.9%
Listing Expenses: 6.7%

Conclusion
Good thing is:
1. PE9.57, ROE16.68% is attractive, debt ratio is healthy.
2. Bad debt is minimum.
3. Have clear dividend direction.

The bad things:
1. Order book 2017 remain RM123.76mil, Unable to allocate the sale within January to 19/05/2017. Is important because 2016 revenue is 234mil, but 2017 order book 123mil. Revenue from January to 19/05/2017 will decide the company performance & price level.
2. Director revenue is consider high.
3. 22% IPO fund use to pay debt.
4. 59.6% revenue depend on 3 major customer.

Conclusions
It is a average IPO. It highly depend on the contract they receive for the company revenue growth.

IPO Price: RM0.63
Good time: RM0.85 (PE13)
Bad time: RM0.46 (PE7)

Company website: www.advancecon.com.my/

3 comments:

  1. Hmm, according to Edge, orderbook more than RM570 million, plus got West Coast Expressway and Pan Borneo jobs! Everybody knows construction theme in Malaysia is damn positive now...

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    Replies
    1. http://www.theedgemarkets.com/article/advancecon-raise-rm567m-ipo

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