Aurelius Technologies Berhad

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Open to apply: 29/11/2021

Close to apply: 03/12/2021
Price determination date: 6/12/2021
Balloting: 07/12/2021
Listing date: 16/12/2021

Share Capital
Market Cap: RM182.847 mil
Total Shares: 358.180 mil shares
***Issue price RM1.36 (final price will finalise after institution offer completed)

Industry  CAGR (2016-2020) in Malaaysia
Semiconductors: 18.5%
Electronic transistors: -0.4%
Integrated circuits: 3.7%

Business (Revenue in 2021)
Manufacturing of semiconductor product, EMS services 
Communications and IoT products: 83.5% 
Electronic devices: 13.8%
Semiconductor components: 2.7%

Revenue by Geo (2021)
Msia: 32.6%
Americas: 46.1%
Europe: 7.5%
Asia: 13.8%

Major Customer by revenue
Customer A: 29.8%, US (Communication devices)
Customer B: 20.2%, US (Communication devices)
Customer C: 23.8%, UK (Communication IoT devices)
Customer D: 9.8%, singapore & US (telematic instrumentation devices)
Customer E: 4.9%, German subsidairy to Cus B (Comunication devices) 
Customer F: New cus for expansion, China (IoT comunication product)

Fundamental
1.Market: Main Market
2.Price: RM1.36 (final price determined 6/12/2021)
3.P/E: 32.4 (EPS: 0.042)
4.ROE(Pro Forma III): 11.79% (forecast using 3mth FPE2022)
5.ROE: 17.95%(FYE2021), 32.62%(FYE2020), 27.33%(FYE2019)
6.Cash & fixed deposit after IPO: 0.143
7.NA after IPO: RM0.54
8.Total debt to current asset after IPO: 0.62 (Debt: 170.442mil, Non-Current Asset: 102.898mil, Current asset: 271.246mil)
9.Dividend policy: PAT 20% dividend policy. 
 
Past Financial Performance (Revenue, Earning Per shares, PAT%)
2021 (7mths): RM200.038 mil (Eps: 0.0369),PAT: 6.6%
2021: RM362.165 mil (Eps: 0.0421),PAT: 4.2%
2020: RM389.305 mil (Eps: 0.0659),PAT: 6.1%
2019: RM358.171 mil (Eps: 0.0667),PAT: 6.7%

Utilisation rate%
Jan 2019: 89%
Jan 2020: 91%
Jan 2021: 94%
Aug 2021: 93%

Unbilled orders
Nov 2021 - Jan 2022: RM164.064 mil
Feb 2022 - Apr 2022: RM85.276 mil
May 2022 - Nov 2023: RM233.335 mil

After IPO Sharesholding
Lee Chong Yeow (Age76) & Loh Hoch Chiang (Age56) : 71%. 

Directors & Key Management Remuneration for FYE2022 (from gross profit 2021)
Total director remuneration: RM1.3695 mil

key management remuneration: RM1.4 mil- 1.7 mil
total (max): RM3.0695 mil or  10.2%  

Use of fund
Machinery & equipment: 38.2%
Repayment borrowing: 28.2%
Working capital: 26.9%
Listing expenses: 6.7%

Highlight
1. Currently have 11 SMT production line. Plan to expand 2 line (2022) and 2 line (2023), annual capacity will increase 198.7%.
***Automated Assembly line. 
2. Development of lithium-ion battery pack system (expectd commerce 4th quarter 2022).

Good thing is:
1. Annual capacity will increase 198.7% after 2023.
2. Sunrise industry. 

The bad things:
1. PE32 quite high but is reasonable if capacity increase double in 2 years. 
2. EMS depend on award of contract from customer.
3. Over 90% trade receivable in USD, business revenue is highly sensitive for fluation of USD. 
4. Revenue did not increase for over 3 years. 
5. Director & key management remuneration quite high from the gross profit portion. 
6. Both major director ages is quite high. 

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is a non-discount IPO. IPO PE32.4 is already price in the potential increase of the manufactury annual capacity.The future EPS will increase to reduce the PE back to normal (competitor at PE 15-25).

*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.