Initial Public Offering (IPO)

Saturday, October 16, 2021

Ecomate Holdings Berhad

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Open to apply: 15/10/2021
Close to apply: 25/10/2021
Balloting: 28/10/2021
Listing date: 08/11/2021

Share Capital
Market Cap: RM115.5 mil
Total Shares: 350 mil shares

Industry CAGR (2010-2020) & Competitor
M'sia Furniture production: CARG 3.8%
M'sia Furniture export: CARG 4.9%
Liihen: PE8.4 ROE15.79
Latitude: PE6.29 ROE9.31
Poh Huat: PE7.07 ROE13.55
Jaycorp: PE7.97 ROE15.48
SernKou: PE27.44 ROE15.78
SpringArt: PE16.93 ROE8.35

Business (Revenue in 2021)
Design & produce living room furniture, bedroom furniture, & others.
M'sia: 45.2%
Asia: 19.2%
Europe: 11.2%
North America: 14.9%
Australasia: 9.5%

Fundamental
1.Market: Ace Market
2.Price: RM0.33
3.P/E: 13.56 (EPS: 0.243)
4.ROE(Pro Forma III): 33.3% (forecast using 3mth FPE2022)
5.ROE: 71%(FYE2021), 68.8%(FYE2020), 148%(FYE2019)
6.Cash & fixed deposit after IPO: 0.066
7.NA after IPO: RM0.08
8.Total debt to current asset after IPO: 0.6929 (Debt: 29.133mil, Non-Current Asset: 15.879mil, Current asset: 42.048mil)
9.Dividend policy: doest not have formal dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2022: (3mths): RM18.794 mil (Eps: 0.0069),PAT%: 12.8%
2021: RM56.342 mil (Eps: 0.0243),PAT%: 15.1%
2020: RM42.398 mil (Eps: 0.0166),PAT%: 12.3%
2019: RM24.141 mil (Eps: 0.0095),PAT%: 13.8%
***FYE 2021 (is Mar2020-Feb2021)
***FPE 2022 (Mar2021-May2021)

After IPO Sharesholding
Jason Koh Jian Hui: 33.1%
Koh Cheng Huat: 33.1%

Directors & Key Management Remuneration for FYE2022 (from gross profit 2021)

Total director remuneration: RM1.128 mil
key management remuneration: RM0.5 mil- 0.75 mil
total (max): RM1.878 mil or 10.6%

Use of fund
Machinery & equipment: 37.1%
Factory & hostel contrustion: 12.4%
Purchase of raw material: 32.6%
Listing expenses: 17.9%

Highlight
1. Factory A: Currently have 4 production line & want to increase 1 production line.
2. Muar Furniture Park: New factory 3 production line (Q4,2022 expected to be commerce).
3. Co-founder Age: Jason Koh(Aged 29), Koh Cheng Huat (Aged 44).
4. Incorporation in 2016: expand rapidly & take 5 year to listing in 2021

Good thing is:
1. ROE is above 30%
2. Revenue is double compare past 3 year.
3. 82.1% IPO fund use to expand business.
4. Both co-founder still below Age 50 (abilities to continue lead business to expand)

The bad things:
1. Selling PE is high compare to other competitor.
2. Concentration of customer base 39.8% (from 4 major customers).
3. Highly dependent on co-founder Jason Koh & Koh Cheng Huat to success & growth in business since 2016.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a good IPO. Quite impressive because incorporate 2016 and IPO within 5years. The weakness is IPO price is expensive compare to average market PE. In consider of the additional production line PE13.56 still acceptable.

*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.

Sunday, September 12, 2021

CEKD Berhad

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Open to apply: 06/09/2021
Close to apply: 17/09/2021
Balloting: 21/09/2021
Listing date: 29/09/2021

Share Capital
Market Cap: RM93.395 mil
Total Shares: 194.573 mil shares

Industry CAGR
CAGR 2020-2025: 3.2% (forecast)
Competitors compare (Net profit margin%)
CEKD: 30.2%
Kentway: 0.3%
Marbach: 18.1%
Shanyu: 20.2%
Yip Lian: 11.2%

Business
Manufacturer of die-cutting moulds & trading of related consumables, tools and accessories.
Malaysia: 85.6% (2020 revenue)
Other countries: 14.4% (2020 revenue)

Fundamental
1.Market: Ace Market
2.Price: RM0.48
3.P/E: 15.5 (EPS: 0.031)
4.ROE(Pro Forma III): 18.03% (forecast using 7mth FPE)
5.ROE: 16.10%(2020), 27.72%(2019), 28.86%(2018)
6.Cash & fixed deposit after IPO: 0.069
7.NA after IPO: RM0.31
8.Total debt to current asset after IPO: 0.44 (Debt: 11.245mil, Non-Current Asset: 46.1mil, Current asset: 25.3mil)
9.Dividend policy: doest not have formal dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2021 (7mths): RM17.705 mil (Eps: 0.0207),PAT%: 22.7%
2020: RM26.355 mil (Eps: 0.0310),PAT%: 22.9%
2019: RM28.363 mil (Eps: 0.0278),PAT%: 19.1%
2018: RM28.732 mil (Eps: 0.0350),PAT%: 25.4%

After IPO Sharesholding
Yap Tian Tion: 74% (indirect)
Yap Kai Ning: 74% (indirect)
Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM0.822 mil
key management remuneration: RM0.30 mil- 0.7mil
total (max): RM1.522 mil or 11.45%

Use of fund
Acquisition of factory for Hotstar: 36.2%
Purchase of new machineries: 12.4%
Upgrade and development of computer softwares and server: 5.4%
Marketing activities: 6.2%
General working capital: 11%
Repayment of bank borrowing: 16.5%
Listing expenses: 12.3%

Highlight
1. Continue growth of Electrical & electronic manufacturing in ASEAN.
2. Growth of paper and paper product industry.
3. Both factorys is to consolidate 3 old rented factory into new factory (1 by IPO fund, & 1 by financed through bank borrowings and/or internally generated funds.

Good thing is:
1. ROE is above 15%.
2. Consolidate factory will increase efficientcy.
3. Paper moulds and E&E industry both still is sunrise industry.

The bad things:
1. High competitor environment (M'sia have around 40 die-cutting moulds manufacturing.
2. Director & key management remuneration over 10% company gross profit.
3. Use 16.5% IPO fund to repay bank borrowing.
4. Factory consolidate did not represent add addional factory line to expand business.
5. 2018-2020 revenue did not growth.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Average IPO. PE15.5 is just around fair PE. The attractive part in their business is the involved in produce steel related product for E&E industry which is the industry in growing.

Saturday, July 3, 2021

Haily Group Berhad

Open to apply: 30/06/2021
Close to apply: 07/07/2021
Balloting: 12/07/2021
Listing date: 21/07/2021

Share Capital
Market Cap: RM61.929 mil
Total Shares: 178.32 mil shares

Industry CAGR volume unit (Malaysia 2016-2020)
Residential : -1.5%
Commercial properties: -3.9%
Industrial properties: -4.0%

Competitors compare (Net profit margin%)
Haily: 6.3%
Kerjaya Prospek: 11.2%
AME Elite: 18.0%
GDB: 6.8%
others: -39.9% to 6.7%

Business
Construction is primarily involved in the building construction of residential and non-residential buildings.
Residential Buildings: 87.23%
Non-residential Buildings: 11.41%
Others: 1.36%

Fundamental
1.Market: Ace Market
2.Price: RM0.68
3.P/E: 11.6 (EPS: 0.0586)
4.ROE(Pro Forma III): 14.88%
5.ROE: 20.09%(2020), 20.18%(2019), 20.53%(2018), 33.04%（2017）
6.Cash & fixed deposit after IPO: 0.257
7.NA after IPO: RM0.39
8.Total debt to current asset after IPO: 0.56 (Debt: 84.821mil, Non-Current Asset: 6.052mil, Current asset: 148.959mil)
9.Dividend policy: 30% profit after tax dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2020: RM166.132 mil (Eps: 0.0586),PAT%: 5.86%
2019: RM157.918 mil (Eps: 0.0497),PAT%: 4.97%
2018: RM173.787 mil (Eps: 0.0474),PAT%: 4.74%
2017: RM121.832 mil (Eps: 0.0704),PAT%: 7.04%

Order Book
2023: RM5.67mil
2022: RM124.23mil
2021: RM330.14mil

After IPO Sharesholding
See Tin Hai: 73.15% (indirect)
Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM2.144 mil
key management remuneration: RM0.4 mil- 0.5mil
total (max): RM2.644 mil or 9.62%

Use of fund
Purchase of construction machinery, equipment, software, office equipment: 20.59%
Working capital: 29.41%
Repayment of bank borrowing: 34.31%
Listing expenses: 15.69%

Highlight
1. 2021 have RM330.14mil order book to be recognised.
***doesn't other special item to be highlight.

Good thing is:
1. PE11.6 is not consider too high.
2. ROE still above 10%
3. Revenue increase from 2017 to 2020

The bad things:
1. PAT% is below 10%
2. Use 34.31% IPO fund to pay debt.
3. Properties industry not going to high expand in 1-2 years.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a average IPO. Properties industry facing negative growth rate from 2016-2020, estimated should be continue to negative this year on lockdown continue. For 3years business growth prospect & risk score please refer to below chart.

Thursday, July 1, 2021

CTOS Digital Berhad

Open to apply: 30/06/2021

Close to apply: 06/07/2021
Balloting: 08/07/2021
Listing date: 19/07/2021

Share Capital
Market Cap: RM411.896 mil
Total Shares: 2,200 mil shares

Industry (Net Profit %)
M'sia 2016-2020 CAGR: 12.9%
M'sia 2016-2025E CAGR: 12.7%
ASEAN 2016-2020 CAGR: 12.8%
ASEAN 2016-2025E CAGR: 11.4%

Competitors compare (EBITDA%)
CTOS: 36.9%
Experian: 24%
CBM: 13.9%

Business
Credit bureaux in the ASEAN region
Malaysia: 94.8%
International B2B: 5.2%

Fundamental
1.Market: Main Market
2.Price: RM1.10
*Institutional price to be determined
*If final price less then RM1.10, balance will be refund.
3.P/E: PE61.8 (EPS: 0.0178)
4.ROE(Pro Forma III): 13.18%
5.ROE: 32.81%(2020), 49.41%(2019), 49.40%(2018),
6.Cash & fixed deposit after IPO: 0.0264
7.NA after IPO: RM0.13
8.Total debt to current asset after IPO: 0.507 (Debt: 41.469mil, Non-Current Asset: 247.716mil, Current asset: 81.829mil)
9.Dividend policy: 60% profit after tax dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2020: RM141.496 mil (Eps: 0.0178),PAT%: 27.9%
2019: RM129.141 mil (Eps: 0.0177),PAT%: 30.2%
2018: RM110.465 mil (Eps: 0.0135),PAT%: 26.8%

After IPO Sharesholding
Creador II: 40% (indirect)
Chung Tze Keong:4.5%
Chung Tze Wen: 4.5%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM1.909mil
key management remuneration: RM3.25mil- 3.5mil
total (max): RM5.409 mil or 4.45 %

Use of fund
Repayment bank borrowing: 70.5%
Acquisition to be identified: 26.7%
Listing expenses: 2.8%

Highlight
1. Competitive advantage: limited number of player able to offer the full suite of digital solutions in Malaysia.
2. Market share in 2020 (Malaysia): 71.2%
3. Expand to Philippines (2020 acquired 51% CIBI)
4. Expand to Thailand (2020 acquired 20% BOL)

Good thing is:
1. High growth, high margin, Consistent ROE business.
2. Less competitors.
3. Revenue continue on growing.
4. Expand to other ASEAN countries.
5. Director & key management remuneration at acceptable category.

The bad things:
1. High PE, at PE61.8
2. 70.5% IPO fund for repayment bank borrowing.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a charging premium PE IPO, with PE61.8. If CTOS successful cases able to duplicate into other ASEAN countries, it will worth this price (if fail to duplicate their successful cases, investor need hold long period for return of capital).
Futures 3 year estimation for business expansion & risk sorce, please refer to below chart.

Wednesday, June 23, 2021

Ramssol Group Berhad

Open to apply: 22/06/2021
Close to apply: 29/06/2021
Balloting: 02/07/2021
Listing date: 13/07/2021

Share Capital
Market Cap: RM100.373 mil
Total Shares: 223.0515 mil shares
Industry (Net Profit %)
Employee engagement platforms market, 2017-2020: CAGR 14.69%

Competitors compare (Profit before tax margin%)
Accenture PLC: PE33.8
Capgemini SE: PE28
HCL Technologies Limited: PE21.13
Infosys Limited: PE33
International Business Machines Corporation: PE24
Tech Mahindra Limited: PE21
Wipro Limited:PE28

Business
1. HCM: Human Capital Management (Consulting and implementation, Sale of software licences, Technical support and maintenance services).
2. IT staff augmentation services
3. HCM technology applications
Malaysia: 45.53%
Singapore: 11.37%
Thailand: 29.82%
Indonesia: 13.07%
Others: 0.21%

Fundamental
1.Market: Ace Market
2.Price: RM0.45 (EPS:RM0.034)
3.P/E: PE13.24
4.ROE(Pro Forma III): 32.22%
5.ROE: 103%(2020), -%(2019), 16.16%(2018), 2.95%(2017)
6.Cash & fixed deposit after IPO: 0.0509
7.NA after IPO: RM0.10
8.Total debt to current asset after IPO: 0.288 (Debt:6.922mil, Non-Current Asset: 4.594mil, Current asset: 24.049mil)
9.Dividend policy: No fixed dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2020: RM25.331 mil (Eps: 0.0340),PAT%: 29.74%
2019: RM15.439 mil (Eps: 0.0200),PAT%: 29.11%
2018: RM12.549 mil (Eps: 0.0007),PAT%: 1.41%
2017: RM6.808 mil (Eps: 0.0004),PAT%: 1.29%
*EPS 2020 & 2019 prospecture book pg234 might not correct.

After IPO Sharesholding (Director)
Dato’ CM Vignaesvaran A/L Jeyandran: 0.11%
Tan Chee Seng: 33.26%
Lee Miew Lan: 17.84%
Liew Yu Hoe: 1.63%
Goh Keng Tat: 0.11%
Sim Seng Loong @ Tai Seng: 0.11%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM2.125 mil
key management remuneration: RM0.3 mil- 0.35mil
total (max): RM2.475 mil or 16.13%

Use of fund
Business expansion into Philippines: 9.98%
Expansion of Feet’s and Lark in Southeast Asia: 25.30%
R&D Research: 16.34%
Working capital: 30.13%
Listing expenses: 18.25%

Highlight
1. Expansion business into Philippines.
2. Expansion of Feet’s and Lark in Southeast Asia
3. Have successful experience in Msia, S'pore, Thailand & Indonesia.

Good thing is:
1. PE13.24 is accepetable.
2. Revenue from multiple country.
3. IPO fund 81.75% use for business expansion.
4. Revenue is increase over the 4 years.

The bad things:
1. ROE is not stable (ROE unable to use for estimationd).
2. Trade receivable sudently increase to RM11.805mil in 2020 (not overdue yet).
3. 18.25% IPO fund use for listing expenses is over average lisiting expenses percentage.
4. Directors & top management remuneration is over 16% from the gross profit.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
This is a IPO company that seek for expansion. Reader have to aware on the unable of the ROE, & have to hold it for aim for growth. It consider high risk and also come with high return potential category come company. This is not a dividend / passive income generated company for investor at this moment. For more on risk vs business expand ratio can refer to below chart.

Yenher Holdings Berhad

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Open to apply: 22/06/2021
Close to apply: 01/07/2021
Balloting: 05/07/2021
Listing date: 15/07/2021

Share Capital
Market Cap: RM177.384mil
Total Shares: 300mil shares

Industry (Net Profit %)
Production Value of Livestock in Malaysia (CAGR): 6.6%
Growth Forecast for the Animal Health and Nutrition Industry (CAGR 2021-25): 4.3%

Competitors compare (Profit before tax margin%)
Yenher: 14.6% (PE12.72)

Peterlabs: 6.8% (PE20.36)

AsiaVet: loss making

RhoneMa: 7.9% (PE17.16)

Danberg: 12%

Ritamix: 10.9% (PE23.49)

Sunzen: loss making

Business
Manufacturing and distribution of animal health and nutrition products.
Distribution: 44.26%
Manufacturing: 55.74%

Local market: 89.77%

Overseas market: 10.23%

Fundamental
1.Market: Main Market
2.Price: RM0.95 (EPS:RM0.0747)
3.P/E: PE12.72
4.ROE(Pro Forma III): 12.70%
5.ROE: 19.39%(2020), 18.73%(2019), 31.30%(2018), 22.09%(2017)
6.Cash & fixed deposit after IPO: 0.2144
7.NA after IPO: RM0.59
8.Total debt to current asset after IPO: 0.16 (Debt: 25.452mil, Non-Current Asset: 46.345mil, Current asset: 155.502mil)
9.Dividend policy: 40% PAT dividend policy.

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2020: RM202.635 mil (Eps: 0.0951),PAT%: 10.73%
2019: RM179.061 mil (Eps: 0.0838),PAT%: 15.07%
2018: RM181.109 mil (Eps: 0.1158),PAT%: 11.03%
2017: RM177.380 mil (Eps: 0.0808),PAT%: 11.05%

After IPO Sharesholding
CGH Holding: 45%
-Cheng Moon Tat: 7.5% direct, indirect 45%
-Cheng Mooh Kheng: 3.5% direct, indirect 45%
-Cheng Mooh Chye: 3.5% direct, indirect 45%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM7.483
key management remuneration: RM0.70mil-0.95mil
total (max): RM8.433mil or 16.09%

Use of fund
Construction of new GMP-Compliant Manufacturing Plant: 50.64%
Purchase of new machinery & equipment: 15.85%
Working capital: 27.30%
Listing expenses: 6.21%

Highlight
1. Current manufacturing production utilisation rate at 100%.
2. New Manufacturing plant increase produce
-Complete feed & formulated product: 353.75% (573 to 2600 tones)
-Biotech animal feed ingredients: 422.65% (287 to 1,500 tones)
3. New Manufacturing plant to be completed build fourth quarter of 2023.

4. Expand to more oversea market.

Good thing is:
1. PE12.72 below average competitor PE.
2. Debt is not high.
3. Have fixed dividend policy.
4. Revenue increase of 4 years.
5. Almost all IPO fund use to expand business.
6. by 2023 production increase 300%-400%

The bad things:
1. Nett profit around 10%.
2. Industry growing CAGR is low 4.3%
3. Director & top management remuneration taking aways 16.09% gross revenue.
4. Three main director age above 52.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a little bit discounted IPO. With the new manafucturing facilites (to be completed by 2023), we should able to see better revenue grow in business. Business grwoth & risk refer to below chart.

Tuesday, June 8, 2021

Nestcon Berhad

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Open to apply: 08/06/2021
Close to apply: 17/06/2021
Balloting: 21/06/2021
Listing date: 29/06/2021

Share Capital
Market Cap: RM180.270mil
Total Shares: 643.822mil shares

Industry (Net Profit %)
Growth forecast Construction Industry CAGR: 7.3%
Growth forecast Real Estate Construction market CAGR: 5.1%
Growth forecast Civil Englineering & Specialised CAGR: 9.1%

Competitors compare (Net profit margin%)
Nestron: 5.6% (PE12.61)
GDB: 9.3% (PE19.88)
Inta Bina: 4.6% (PE15.92)
MGB:2.8% (PE20.97)
Pesona Metro: 2.8% (loss making)
TCS: 10.7% (PE12.87)

Business
Building segment: 57.9% (residential, commercial, industrial & other)
Civil engineering & infra: 42.1% (earthworks, roadworks, drainage & other)

Fundamental
1.Market: Ace Market
2.Price: RM0.28 (EPS:RM0.0222)
3.P/E: PE12.61
4.ROE(Pro Forma III): 12.58%
5.ROE: 19.80%(2020), 27.21%(2019), 23.93%(2018), 17.75%(2017)
6.Cash & fixed deposit after IPO: 0.15
7.NA after IPO: RM0.18
8.Total debt to current asset after IPO: 1.02 (Debt: 253.785mil, Non-Current Asset: 120.584mil, Current asset: 246.884mil)
9.Dividend policy: Does not have any formal dividend policy.

Past Financial Performance (Revenue, Earning Per shares)
2020: RM344.479 mil (Eps: 0.0222)
2019: RM422.786 mil (Eps: 0.0227)
2018: RM217.764 mil (Eps: 0.0116)
2017: RM190.857 mil (Eps: 0.0085)

Order book
To be billed next 1-3 years: RM1.212 bil.
Net Profit Margin
2020: 4.2%
2019: 3.7%
2018: 4.5%
2017: 3.1%

After IPO Sharesholding
Mohd Noor Bin Setapa: 0.1%
Datuk Ir.Dr.Lim: 60%
Ong Yong Chuan: 10%
Lim Joo Seng: 0.3%
Nor Azzam bin Abdul Jalil: 0.1%
Yeoh Sheong Lee: 0.1%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM1.861 mil or 5.59%
key management remuneration: RM1.05 mil - 1.3mil or 3.15%-3.91%
total (max): RM3.161 mil or 9.50%

Use of fund
Establish IBS facilitiy: 13.3%
Acquire machineries & equipment: 14.7%
Upgrade software and system: 2.2%
Repayment bank borrowings: 36.6%
Working capital: 24.3%
Listing expenses: 8.9%

Good thing is:
1. IPO price at average PE, not consider expensive.
2. ROE have over 10%
3. Having enought order to sustain next 3 year revenue.
4. IPO in low PE environment time.

The bad things:
1. Having low net profit after tax (less than 5%)
2. Did not have dividend formal policy.
3. Debt ratio is a bit high.
4. Use 36.6% IPO fund to pay debt.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a normal IPO. Able to get other competitor that have better performance compare to this company.