Wednesday, December 13, 2017

Binasat Communications Berhad

IPO (Rating 3.25 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 13/12/2017
Close to apply: 26/12/2017
Listing date: 08/01/2018

Share Capital
Market Cap: RM56.952 mil
Shares Issue to sell: 125.979 mil shares (Open to public:85.979 mil shares)
Enlarged Issued Shares: 260 mil shares

Business (2017 Revenue)
Satellite Telecommunication Network: 51.1%
Mobile Telecommunication Network: 28.9% (mobile network instalation & setup)
Fibre Optic Telecommunication Network: 20.0%

Major Customer
Maxis 49.5%
Huawei 26.3%
Wavesstream Corp: 2.9%

Fundamental
Market: ACE Market
Price: RM0.46 (eps: 0.03855)
P/E & ROE: PE11.93, ROE16.19%
Cash & fixed deposit after IPO: RM0.09 per shares
NA after IPO: RM0.2375
Debt ratio after IPO: 0.228 (Debt: 18.249 mil, Non-Current Asset: 36.635 mil, Current asset: 43.508 mil)
Dividend policy: -

Competitor PE & ROE
Binasat: PE11.93, ROE
OCK: PE26.2, ROE6.59
Redtone: PE-ve, ROE-ve

Competitor Profit Margin
Binasat: 18.38%
Fiberail SB: 27%
OCK: 7.2%
Wellcom: 8.66%

Financial
Trade Receivable: 122
Trade payable: 75
Credit for customer: 9.9% from payables trade exceeded credit period)

Past Financial Proformance (Revenue, EPS before IPO)
2017: RM54.519 mil (eps: 0.0576)
2016: RM46.434 mil (eps: 0.0412)
2015: RM39.435 mil (eps: 0.0272)
2014: RM31.819 mil (eps: 0.0194)

Net Profit Margin
2017: 18.38%
2016: 15.43%
2015: 11.99%
2014: 10.58%

After IPO Sharesholding
Tan Sri Datuk Seri Ahmad Fuad: 0.4%
Na Boon Aik: 25.8%
Na Bon Tiam: 25.8%
Dato' Seow Thiam Fatt: 0.2%
Dato' Tan Yee Boon: 0.2%
Datuk Lalla Nezha: 0.2%

Director Remuneration (from gross profit 2017)
Tan Sri Datuk Seri Ahmad Fuad: 0.49%-0.73%
Na Boon Aik: 4.62%-4.86%
Na Bon Tiam: 4.38%-4.62%
Dato' Seow Thiam Fatt: 0.24%-0.49%
Dato' Tan Yee Boon: 0-0.24%
Datuk Lalla Nezha: 0-0.24%
Total director remuneration from gross profit: 10.21%-11.18%

Use of fund
Setting up teleport: 36.3%
Enchance operation & maintainence services capability: 12.4%
Enchance fibre optic network installation & commissioning services: 12.1%
Expand business into Vietnam, Myanmar & Loas: 3.8%
Working capital: 27.3%
Listing expenses: 8.1%

Conclusion
Good thing is:
1. Sunrise Industry.
2. PE & ROE is in reasonable level.
3. Having low debt ratio.
4. Revenue & EPS continue growing for pass 4 years.
5. Profit margin increasing.
6. Co-founder Na Bon Tiam still in the company, total up Na family hold 50%
7. IPO fund 91.9% is using to expand busisness.
8. Expnad into Myammar, Vietbnam & Loas.

The bad things:
1. Listing in ACE amrket.
2. No formal dividend policy.
3. Profit Margin basic is not the industry leader, but still in acceptable range.
4. Trade receivable need average 122 days.
5. Director fees is 10.21%-11.18% which is consider too high.

Conclusions
It is a good IPO & it is a runrise industry. The only concern part is the director fees (high director fee is not good for business), & fast changing techonology environment in their business industry.

IPO Price: RM0.46
Good time: RM0.62 (PE16)
Bad time: RM0.305 (PE8)