Monday, June 19, 2017

Advancecon HOlding Berhad

IPO (Rating  2.25 star out of 5.0)

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

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%

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%

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.

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:


  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...


  2. This criteria for the whole IPO sector must be great to invest better for future results.

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