IPO (Rating 2 star out of 5 )
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 29/06/2015
Close to apply: 06/07/2015
Price Determination Date: 07/07/2015
Listing date: 28/07/2015
Fundamental
Market: Main Market
Price: RM1.20
***Final retail price not yet fixed. If final price lower than RM1.20, balance will refund to bank acct of who's apply, if final retail price more than RM1.20 , there will use RM1.20 as offer price
***Not to use manual post apply, as the price might difference & refund process will be more easy & safety.
EPS: RM0.097
P/E: 12.37x
NTA after IPO: RM0.24
Debt ratio: 0.753 (Debt: RM943 mil, Asset: RM1,252 mil)
Dividend policy: Suggested minimum 35% dividend policy on profit
Casflow Statement: RM51mil@2012, RM83mil@2013, RM183mil@2014
Business
Construction
Manufacturing & sale of precast concrete product
Mechanical, electrical & plumbing services
Foundation & geotechnical engineering services
Main Revenue (2014)
Malaysia: 86.4%%
Singapore: 13.6%
Utilisation of fund
The Suncon does not issue new shares, all offer sale of shares is from shareholders shares (Mainly from Sunway Berhad).
Estimated RM478.4 mil from sale of shares will paid to original shareholders.
**No IPO fund is allocated for Sunway Constructions Group Berhad.
Director
Dato' Ir Goh Chye Koon (less than 1%)
Kwan Foh Kwai (less than 1%)
Dato' Siew Kim Lun (less than 1%)
Dato Dr. Ir Johari Bin Basri (less than 1%)
Dato' Chew Chee Kin (less than 1%)
Evan Cheah (58.6% Indirect)
Non-director
Tan Sri Jeffrey Cheah 58% (indirectly)
Conclusion
Good thing is:
1. Fundamentally the company is healthy, still have profit with EPS RM0.097 (P/E 12.37x, 2014). However still have many construction company below this P/E12.37
3. Debt ratio still healthy, but still not the very safe level.
4. Business is under control of co-founder family, the Jeffrey Cheah family.
5. Business in Main board market, which give better security in capital protection.
6. Having many Dxtx' to get more business.
7. The brand name Sunway will attract investor.
The bad things:
1. No fund raising from IPO. All fund is sell of shares & payable to original exsting Sunway Construsction Group Berhad sharesholders. Whereby, I only can estimated it does not have any extra fund from IPO to grow the company.
2. Does not have every clear future plan on business, & the purpose of separate from Sunway Berhad not very clear.
3. Net tangible asset if RM0.24, IPO RM1.20 is 5x times higher than net tangible assets.
Overall, we can see the abilities of generate income from future. However, the business if heavily depend on getting projects. I would like to suggest this is a normal IPO, not to buy as long as above RM1.00.
Compare to privatization activities, Sunway Construction Group Berhad more likely like the total opposite the privatization without fund raising & no any other changes, except shareholders change.