KAWAN RENERGY BERHAD

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opinion and reader should take their own risk in investment decision.

Open to apply: 24 Apr 2024 
Close to apply: 14 May 2024
Balloting: 17 May 2024
Listing date: 29 May 2024

Share Capital 
Market cap: RM165 mil
Total Shares: 550 mil shares
First day listing tradable shares: 155.5mil shares

Industry CARG
Industrial process equipment industry size (Malaysia), 2020 – 2023: 14.63%
Oleochemical industry size (Malaysia), 2020 – 2023: 13.98%
Electricity generation and consumption (Malaysia), 2020 – 2023: 4.09%
Oil and gas industry size (Malaysia), 2020 – 2023(p): 1.48%
Food and beverage manufacturing industry size (Malaysia), 2020 – 2023: .7.07%
Industry competitors comparison (net profit%)
1.Kawan Group: 13.50% 
2.Ngeam Engineering Works Sdn. Bhd. : 13.71%
3.Amalgamated Metal Corporation (M) Sdn. Bhd: 11.33%
4.Yuen Fee (Wan Soon) Engineering Sdn. Bhd.: 13.09%
5.Wasco Process Engineering Sdn Bhd: 8.1% (PE10.4)
6.Others: 0.33% to 3.19%

Business (FYE 2023) 
Engineering solutions provider (Design, fabrication, installation and/or commissioning solutions)
1. Industrial process equipment: 49.2%
2. Process plants: 28.2%
3. Renewable energy and co-generation plants: 22.4%
4. Others: 0.2%

Fundamental 
1.Market: Ace Market
2.Price: RM0.30
3.Forecast P/E: 12.4
4.ROE(Proformal IV):  18.03%
5.ROE:24.89%(FYE2023) , 31.52%(FYE2022), 17.69%(FYE2021), 12.63%(FYE2020)
6.Net asset: 0.13
7.Total debt to current asset: 0.767  (Debt: 48.358mil, Non-Current Asset: 22.344mil, Current asset: 99.809mil)
8.Dividend policy: doesn’t have formal dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%) 
2023 (FYE 31Oct): RM98.379 mil (Eps: 0.0240), PAT: 13.5%
2022 (FYE 31Oct): RM139.184 mil (Eps: 0.0260), PAT: 10.2%
2021 (FYE 31Oct): RM64.041 mil (Eps: 0.0130), PAT: 10.7%
2020 (FYE 31Oct): RM48.823 mil (Eps: 0.008), PAT: 9.1%

Major customer (2023) 
1.Ramatex Textiles Industrial Sdn Bhd: 16.3%
2.Oiltek Sdn Berhad: 14.4%
3.Oleon Group: 13.9%
4.Munzing Malaysia Sdn Bhd: 11.7%
5.Eyvap Sabun Malaysia Sdn Bhd: 4.4%
***total 60.7%

Major Sharesholders 
1.Lim Thou Lai: 70.5%
2.Chong Hon Choong: 1.2%
3.Heng Siew Aun: 2.0%
Directors & Key Management Remuneration for FYE2024 
(from Revenue & other income 2023)
Total director remuneration: RM0.748 mil
key management remuneration: RM0.35 mil – RM0.55 mil
total (max): RM1.298 mil or 5.41%

Use of funds 
1.Working capital: 45.5%
2.Investment into a new 2MW power plant: 15.1%
3.Improvement of Bercham Plant output: 7.6%
4.Purchase of additional machinery: 1.5%
5.Repayment of bank borrowings: 18.2%
6.Estimated listing expenses: 12.1%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is good IPO. The company is in sunrise industry. 

*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.