Kim Hin Joo Berhad

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

Date
Open to apply: 19/06/2019
Close to apply: 26/06/2019
Listing date: 08/07/2019

Share Capital
Market Cap: RM163.4 mil
Shares Issue: 133 mil shares (IPO 76 mil, Company Insider/Miti/Private Placement 57 mil)

Business
Retail & Distribution of baby, children, & maternity products.

Geo
Malaysia: 98.25%
Overseas: 1.75%

Fundamental
Market: Ace Market
Price: RM0.43 (eps: RM0.0292)
P/E & ROE: PE14.73, ROE16.43%
Cash & fixed deposit after IPO: RM0.0328 per shares
NA after IPO: RM0.18
Total debt to current asset after IPO: 0.29 (Debt: 14.38 mil, Non-Current Asset: 4.243 mil, Current asset: 48.884 mil)
Dividend policy: 40% on PAT dividend.

Financial Ratio
Trade receivable: 6.32 days
Trade Payable: 61.57 days
Inventory turnover: 240.14 days

Past Financial Proformance (Revenue, EPS)
2018: RM97.687 mil (eps: 0.0366)
2017: RM93.310 mil (eps: 0.0381)
2016: RM84.857 mil (eps: 0.0402)
2015: RM77.031 mil (eps: 0.0270)

Net Profit Margin
2018: 11.38%
2017: 12.39%
2016: 14.42%
2015: 10.65%

After IPO Sharesholding
KHI (Pang Kim Hin): 62%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Pang Kim Hin: RM60k
Pang Shu Ming: RM362k
Goh Poh Teng: RM379k
Chew Soo Lin: RM32k
Yen Se-Hua Stewart: RM30k
Kor Yann Ning: RM28k
Key Management: RM0.956mil - RM1.250mil
Total director & key management remuneration from gross profit: 4.18%

Use of fund
Business Expansion & Capital Expenditure: 61.20%
Working Capital: 27.17%
Listing Expenses: 11.63%

Competitor (PAT Profit Margin)
Asia Brands Berhad: -17.11%
Fiffy Sdn Bhd: 5.44%
Happikiddo: 3.83%
Manjaku Baby Centre 2.58%
Poney Gaments:0.29%
QQ Baby: 0.48%
Serimep: 7.48%
Twins Baby: -1.82
Toy'R'Us: 12.17%
KHJ Group: 11.38%

Industry Analysis (CAGR 2015-2018, base year 2018)
Imports of Baby product: CAGR 13.19%

Conclusions
Good thing is:
1. PE14.73 & ROE16.43% still acceptable.
2. Director fees + kay management remuration is acceptable.
3. Almost all IPO fund use to expend busines.
4. Baby product is some kind of needs products.
5. Import of baby product is increase with CAGR 13.19% per year, which the industry is increase in the demand.

The bad things:
1. Listing in Ace market.
2. Turnover inventory 240.14days.
3. Revenue is increasing over the pas 4 years, but is in a slow mode, after add in inflation, the company might not have increase in revenue.
4. Profit margin is not encourage.
5. Average competitor margin is not encourage. 

Conclusions
Overall might not a good investment as compare to others competitor, the business might not in the good profit business.

IPO Price: RM0.43
Good time: RM0.47 (PE16)
Bad time: RM0.26 (PE9)

UWC Berhad

IPO Rating ( 2.75 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 17/06/2019
Close to apply: 28/06/2019
Listing date: 10/07/2019

Share Capital
Market Cap: RM300 mil
Shares Issue: 103 mil shares (IPO 70 mil, Company Insider & placement 336 mil)

Business
Provision of percision sheet metal fabrication, value added assembly services, & percision machined components.

Geo
Msia: 50.9%
S'pore: 40.5%
USA:2.5%
China:2.8%
France: 2.0%
Others: 1.3%

Fundamental
Market: Main Market
Price: RM0.82 (eps: RM0.063)
P/E & ROE: PE13, ROE20.2%
Cash & fixed deposit after IPO: RM0.142 per shares
NA after IPO: RM0.229
Total debt to current asset after IPO: 1.58 (Debt: 64.482 mil, Non-Current Asset: 23.86 mil, Current asset: 40.622 mil)
Dividend policy: 20% on PAT dividend.

Financial Ratio
Trade receivable: 88 days
Trade Payable: 60 days

Past Financial Proformance (Revenue, EPS)
2018: RM136.495 mil (eps: 0.063)
2017: RM92.158 mil (eps: 0.0032)
2016: RM76.311 mil (eps: 0.023)

Net Profit Margin
2018: 22.9%
2017: 16.1%
2016: 25.4%

After IPO Sharesholding
UMC Capital (Ng Chai Eng & Lau Chee Kheong) : 52.6%

Director Remuneration for FYE2019 (from gross profit 2018)
Dato' Ng Chai Eng: RM971k
Lau Chee Kheong: RM971k
Dato' Wan Hashim Bon Wan Jusoh: RM58k
F'ng Meow Cheng: RM29k
Lio Chee Yeong: RM29k
Total director remuneration from gross profit: 4.8%

Use of fund
Purchase of new machines & equipment: 56%
Repayment debt: 31.3%
Working capital: 5%
Listing expenses: 7.7%

Competitor (PAT Profit Margin)
Frencken: 8.1%
Kobay Technology: 6.2%
Alpha: 10.1%
UMC: 17%

Industry Analysis (CAGR 2015-2018, base year 2018)
CAGR of industry 6.9%

Machinery Utilisation
Oversall Utilisation: 85%

Conclusion
Good thing is:
1. PE13 & ROE20 is healthy.
2. Half revenue is from foreign site, at least not too depend on local revenue.
3. Revenue & EPS increase over 3 years.
4. Net profit margin have around 20%.
5. The needs of the industry product still continue growing CARG 6.9%

The bad things:
1. Debt is too high compare to their current asset.
2. Director fees over 3% of gross revenue.
3. IPO funds 31.3% use for pay debt.

Conclusions
Overall the business is growing. Pricing at fair level.

IPO Price: RM0.82
Good time: RM1.00 (PE16)
Bad time: RM0.57 (PE9)

Mestron Holdings Berhad

IPO Rating ( 2.00 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 23/05/2019
Close to apply: 03/06/2019
Listing date: 18/06/2019

Share Capital
Market Cap: RM126.4 mil
Shares Issue to sell: 237 mil shares (IPO 39.5 mil, Company Insider & placement 197.5 mil)

Business
Manufacturer of steel poles (street light, traffic light, Camera Pole, & others)

Geo
Msia: 92.7%
Australia: 1.8%
Singapore: 1%
Korea: 3.6%
Others: 0.9%

Fundamental
Market: Ace Market
Price: RM0.16 (eps: RM0.0118)
P/E & ROE: PE13.6, ROE15%
Cash & fixed deposit after IPO: RM0.0115 per shares
NA after IPO: RM0.07
Total debt to current asset after IPO: 0.61 (Debt: 27.235 mil, Non-Current Asset: 37.490 mil, Current asset: 43.938 mil)
Dividend policy: No fixed dividend policy.

Financial Ratio
Trade receivable: 108 days (Ave over 4yrs)
Trade Payable: 89 days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM63.680 mil (eps: 0.0118)
2017: RM60.747 mil (eps: 0.0108)
2016: RM44.374 mil (eps: 0.0067)
2015: RM40.540 mil (eps: 0.0028)

Net Profit Margin
2018: 14.6%
2017: 14.1%
2016: 11.9%
2015: 5.4%

After IPO Sharesholding
Por Teong Eng: 35%
Loon Chin Seng: 35%

Director Remuneration for FYE2019 (from gross profit 2018)
Tajul Arifin Bin Mohd Tahir: RM60k
Por Teong Eng: RM600k
Loon Chin Seng: RM600k
Leong Peng Phooi: RM36k
Phang Sze Fui: RM78k
Total director remuneration from gross profit: 6.5%

Use of fund
Expansion of Manufacturing Facility, Machines & Equipment: 51.4%
Working Capital: 20.5%
Repayment Debt: 15.8%
Listing Expenses: 12.3%

Competitor (Gross Profit Margin)
Decor Pole S/B: 7.3%
Lysaght Industries S/B: 29.8%
Oversea Deco Industries S/B:18%
Perfect Pole S/B: 41.1%
Mestron Group:28.9%

Industry Analysis (CAGR 2015-2018, base year 2018)
CAGR: 13.5%

Conclusion
Good thing is:
1. PE13.6 & ROE15% is healthy.
2. Debt ratio still healthy.
3. Revenue is increasing since 2015.

The bad things:
1. Business too focus in Malaysia.
2. Listing in Ace market.
3. No fixed dividend policy.
4. Director fees is more than 3% of gross profit.
5. Use 15.8% IPO fund to pay debt.
6. Competitor have better profit margin.
7. Change of new government might effect the new gross profit margin in coming years.

Conclusions
Overall is a normal IPO. Is better to wait another few quarters result to check on the earning to judge the investment opportunities.

IPO Price: RM0.16
Good time: RM0.185 (PE16)
Bad time: RM0.100 (PE9)

HPMT Holdings Berhad

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

Date
Open to apply: 17/05/2019
Close to apply: 29/05/2019
Listing date: 12/06/2019

Share Capital
Market Cap: RM183.953 mil
Shares Issue to sell:  116.615 mil shares (IPO 16.426 mil, Company Insider & placement 100.189 mil)

Business
Manufacturing cutting tools (Drilling, milling, engireering needs cutting tools), trading on others brand cutting tools, & Coating.

Geo
Local: 19.9%
Europe: 50.7%
Asia: 28.9%
Others: 0.5%

Fundamental
Market: Main Market
Price: RM0.56 (eps: RM0.0372)
P/E & ROE: PE15, ROE12.17%
Cash & fixed deposit after IPO: RM0.054 per shares
NA after IPO: RM0.34
Total debt to current asset after IPO: 0.968 (Debt: 59.947 mil, Non-Current Asset: 111.018 mil, Current asset: 61.925 mil)
Dividend policy: Board suggestion at 30% dividend policy.

Financial Ratio
Trade receivable: 77 days (Ave over 4yrs)
Trade Payable: 22 days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM85.296 mil (eps: 0.0483)
2017: RM85.152 mil (eps: 0.0587)
2016: RM75.162 mil (eps: 0.0497)
2015: RM68.876 mil (eps: 0.0420)

Net Profit Margin
2018: 16.1%
2017: 17.5%
2016: 17.5%
2015: 16.5%

After IPO Sharesholding
Ku He @ Khoo Yee Her: 62.6%
Khoo Seng Giap: 0.1%
Tan Kim Chuan: 0.1%
Dato'Khoo Ah Chye: 0.1%

Director Remuneration for FYE2019 (from gross profit 2018)
Ku He @ Khoo Yee Her: RM1.008 mil
Khoo Seng Giap: RM0.5001 mil
Tan Kim Chuan: RM0.3939 mil
Dato'Khoo Ah Chye: RM38.5k
Peter Ho Kok Wai: RM46.5k
Chua Put Moy: RM41.5k
Lee Ee Sian: RM44.5k
Oei Kok Eong: RM41.5k
Total director remuneration from gross profit: 5.6%

Use of fund
Purchase of new machineries & equipment: 80.3%
Working Capital: 6.9%
Listing Expenses: 12.8%

Competitor PE & ROE
Halcyon Technology (Thailand): PE5.34, ROE16.83
NS Tool (Japan): PE13.65, ROE15.48
Msia competitors (non-listed) Revenue: RM5mil-RM11.9mil

Industry Analysis (CAGR 2019-2023, base year 2018)
Cutting tools Market size: CAGR 3.8%

Conclusion
Good thing is:
1. PE15 is acceptable.
2. Market network is diversified.
3. Have clear dividend policy.
4. Revenue is increasing over past 4 years.
5. Net prfoti margin above 15%.
6. Almost all IPO funds use to expand business (except listing expenses).
7. The company plan to increase monthly production 43.5% by end of FYE 2021.

The bad things:
1. Director remuneration over 3% gross profit.
2. ROE12.17% less than 15%.
3. The industry CAGR only 3.8%
4. Competitor have better PE & ROE.

Conclusions
Overall is a good IPO. The IPO consider fair & we saw the intention of growing the business. However, the industry involved, having a slow growing phase.
After world war II, development develop rapidly, & most building is aging. Might or might not, there is possiblilities that the industry will need some growth in futures.

IPO Price: RM0.56
Good time: RM0.665 (PE18)
Bad time: RM0.0375 (PE10)

Greatech Technology Berhad

IPO Rating ( 2.50 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 13/05/2019
Close to apply: 24/05/2019
Listing date: 13/06/2019

Share Capital
Market Cap: RM381 mil
Shares Issue to sell: 119.750 mil shares (IPO 18.780 mil, Company Insider & placement 100.97 mil)

Business
Manufacture of Automated equipment & provision of parts and services for Solar, semiconductor, & consumer electronic sectors.

Geo
Local: 10.01%
Foreign: 89.99% (Vietnam 62.68% & USA 25.37%)

Fundamental
Market: Ace Market
Price: RM0.61 (eps: RM0.0627)
P/E & ROE: PE9.73, Ave ROE over 4yrs 11.74%
Cash & fixed deposit after IPO: RM0.11 per shares
NA after IPO: RM0.22
Total debt to current asset after IPO: 0.43 (Debt: 77.358 mil, Non-Current Asset: 39.243 mil, Current asset: 178.639 mil)
Dividend policy: Does not fixed any dividend policy.

Financial Ratio
Trade receivable: 65days (Ave over 4yrs)
Trade Payable: 62days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM219.582 mil (eps: 0.0627)
2017: RM93.914 mil (eps: 0.0376)
2016: RM22.703 mil (eps: 0.0115)
2015: RM21.393 mil (eps: 0.0111)

Net Profit Margin
2018: 14.45%
2017: 20.29%
2016: 25.59%
2015: 26.17%

After IPO Sharesholding
Tan Eng Kee: 74%

Director Remuneration for FYE2019 (from gross profit 2018)
Ooi Hooi Kiang: 66k
Tan Eng Kee: 698k
Khor Lean Heng: 510k
Mariamah Binti Daud: 66k
Ooi Ching Hock: 66k
Total director remuneration from gross profit: 3.1%

Use of fund
Business Expansion: 24.64%
Capital Expenditure: 6.85%
R&D expenditure: 6.85%
Working Capital: 50.03%
Repayment Debt: 6.16%
Lisitng Expenses: 5.47%

Competitor PE & ROE
Penta: PE22.28, ROE16
Vitrox: PE30.45, ROE24.88
Sam: PE14.18, ROE14.61
Mi: PE21.11, ROE13.42
Genetec: PE7.09, ROE11.38
Elsolf: PE14.29, ROE35.53

Industry Analysis (Asean 2012-2018)
Global Solar Cell & Solar Module Production CAGR:27.4% & 27.4%
Global Sales Semiconductor CAGR: 8.7%
Consumer Electronic CAGR: 6.1%

Conclusion
Good thing is:
1. PE9.73 still below PE10
2. Revenue is growing past 4 year.
3. Director fees around 3%
4. They are in the sunrise industry.
5. Business having 89.99% is export. The strong USD will benefit the company.

The bad things:
1. Average ROE11.74% (Below ROE15% level), their competitor ROE is higher.
2. IPO fund 6.16% use to pay debt.
3. IPO in the ACE market.
4. Effected by current trade war (might be opportunities & also might not).

Conclusions
Overall is a above average IPO. The most of the funds is use for expand the business.
Demand of their product is increasing every years.

IPO Price: RM0.61
Good time: RM0.94 (PE13)
Bad time: RM0.43 (PE7)

Leong Hup International Berhad

IPO Rating (3.0 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 25/04/2019
Close to apply: 03/05/2019
Listing date: 16/05/2019

Share Capital
Market Cap: RM 4.015 bil (published prospecture book wrote 1.5bil is typo)
Shares Issue to sell: 937.5 mil shares (IPO 98 mil, private placement 839.5 mil)
Enlarged Issued Shares: 25.68%

Business
Feedmill 39.3%, Livestock & other poultry related product 61.0%

Geo
Msia: 28.8%
Indonesia: 31.7%
Singapore: 19.8%
Vietnam: 19.20%
Philippines: 0.5%

Fundamental
Market: Main Market
Price: RM1.10 (eps: RM0.0566)
P/E & ROE: PE20.8, ROE12.5%
Cash & fixed deposit after IPO: RM0.15 per shares
NA after IPO: RM0.42
Total debt to current asset after IPO: 1.30 (Debt: 2.985 bil, Non-Current Asset: 2.659 bil, Current asset: 2.304 bil)
Dividend policy: Target payout ratio 30% on Net profit.

Financial Ratio
Trade receivable: 37.2days
Trade Payable: 23.7days

Past Financial Proformance (Revenue, EPS)
FPE 2018: RM4.690 bil (10mths eps: 0.0513)
2017: RM5.501 bil (eps: 0.0566)
2016: RM5.257 bil (eps: 0.0537)
2015: RM4.714 bil (eps: 0.0323)

Net Profit Margin
FPE 2018: 4.7% (10 mths)
2017: 4.5%
2016: 5.1%
2015: 3.5%

After IPO Sharesholding
Emerging Glory: 52.8%

Director Remuneration for FYE2019 (from gross profit 2017)
Lau Chia Nguang: RM5.90 mil
Dato' Lau Eng Guang: RM4.86 mil
Tan Sri lau Tuang Nguang: RM5.04 mil
Lau Joo Hong: RM5.66 mil
Lau Joo Han: RM4.86 mil
Lau Joo Keat: RM4.90 mil
Other 8 director: RM0.902 mil
Total director remuneration from gross profit: 3.52%

Use of fund
Capital Expenditure: 75.5%
Working Capital: 12.0%
Lisitng Expenses: 12.5%

Competitor PE & ROE
QL:PE50.32, ROE11.48
Teoseng: PE11.86, ROE10.88
CP Food: PE n/a, ROE10.1
Japfa: Pe n/a, ROE0.2

Industry Analysis (Asean 2012-2018)
oultry Meat Consumption growth average per year: 5.2%
Animal Feed import average per year: 12.92%
Animal Feed production: 8.15%

Conclusion
Good thing is:
1. Produce necessity product (e.g. Egg)
2. Only depend on M'sia market 28.8%, other is export.
3. Trade receivable is less than 3 month.
4. Revenue is increase over 3 years.
5. 75.5% IPO fund use to expand business.
6. The needs of this industry is increasing because of population increasing.

The bad things:
1. Net profit margin very low (below 5%).
2. ROE is 12.5%, if 15% should be better.
3. NTA is RM0.42
4. Growth rate should not be very high because of net profit margin below 5%.

Conclusions
Overall is a slightly better IPO compare to normal IPO. Because of the needs of the industry, the demand will keep increasing. We should see a stable growth (but not big growth) in the company.
More suitable to investor that buy & keep as defensive portfolio.

IPO Price: RM1.10
Good time: RM1.28 (PE25)
Bad time: RM0.515 (PE10)

Gagasan Nadi Cergas Berhad

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

Date
Open to apply: 13/12/2018
Close to apply: 24/12/2018
Listing date: 08/01/2019

Share Capital
Market Cap: RM225.900 mil
Shares Issue to sell: 200 mil shares (IPO 140mil, private placement 60mil)
Enlarged Issued Shares: 753 mil shares

Business
Building construction, management services for hostel & related facilities, Cooling system, property development.

Fundamental
Market: Ace Market
Price: RM0.30 (eps: RM0.061)
P/E & ROE: PE4.54, ROE 11.45% (estimated by FPE18 earning)
Cash & fixed deposit after IPO: RM0.1425 per shares
NA after IPO: RM0.53
Total debt to current asset after IPO: 0.55  (Debt: 505.499 mil, Non-Current Asset: 192.787 mil, Current asset: 717.309 mil)
Dividend policy: suggest up to 30% on Net profit.

Financial Ratio
Trade receivable: 64 days
Trade Payable: 84 days

Order Book Revenue by Completion Date
2018: RM 11.88 mil
2019: RM 38.06 mil
2020: RM272.60 mil
2021: RM360.32 mil

Past Financial Proformance (Revenue, EPS)
FPE 2018: RM121.646 mil (6mths eps: 0.0231)
2017: RM212.511 mil (eps: 0.0661)
2016: RM227.854 mil (eps: 0.0978)
2015: RM206.344 mil (eps: 0.0502)
2014: RM324.028 mil (eps: 0.0738)

Net Profit Margin
FPE 2018: 14.29% (6mths)
2017: 23.42%
2016: 32.32%
2015: 18.31%
2014: 17.15%

After IPO Sharesholding
Hj Wan Azman: 66.65%
Dato' Sri Subahan: 6.78%
Ir. Dr. Muhamad Fuad: 0.07%
Siti Naaishah: 0.07%
Chng Boon Huat: 0.07%

Director Remuneration for FYE2019 (from gross profit 2017)
Hj Wan Azman: RM1.640 mil
Dato' Sri Subahan: RM0.840 mil
Ir. Dr. Muhamad Fuad: RM0.131 mil
Siti Naaishah: RM0.120 mil
Chng Boon Huat: RM0.125 mil
Total director remuneration from gross profit: 3.6%

Use of fund
AFF Mixed Development: 33.3%
Capital expenditure on product: 15.5%
Working capital: 39.3%
Listing expenses: 11.9%

Conclusion
Good thing is:
1. IPO price RM0.30 below net asset RM0.55 (NA after deduct for trade receivable RM615.99 that billed monthly basic until 2034 & 2037, NA is RM0.39)
2. Have clear dividend policy.
3. Pricing IPO at low (PE4.54) match back to the slow market situation for property & construction.
4. 2020 & 2021 revenue will grow better.
5. Director fees range at acceptable level compare the company gross profit.
6. 88.1% IPO fund use for business expansion.

The bad things:
1. Contrusction business & property development industry estimated will not growing for coming 2 years.
2. Estimated 2018 & 2019 revenue will drop based on estimation using existing order book.
3. ROE% only 11.45
4. Previous revenue difficult to use as forecast for futures performance under new government.
5. Listing status is Ace market (however the industrial rebound it will have opportunities to go main market based on current revenue)

Conclusions
1. Is a above average IPO. Overall able to see the honesty of the IPO. The IPO price pricing at fair level compare to the company business situation.
2. PE4.54 is based on 2017 revenue. If based on forecast revenue on 2018 PE should be PE6.49
3. The timing is not encourage the company to get a good price (current property & construction industry), however with the potential revenue estimated hope to sell it able to transfer into main market after 3 years. Invest in this company need to be patient & hold for more than 3 years to see good return.
4. Rating should be 3.25 out of 5 start. However consider on the overall property & construction situation, I have no choice to rate at 2.25. 

IPO Price: RM0.30
Good time: RM0.42 (PE9)
Bad time: RM0.23 (PE5)