IPO (Rating 2 star out of 5 )
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 31/12/15
Close to apply: 29/01/16
Listing date: 18/02/16
Fundamental
Market: Main Market
Price: RM1.70 (RM1.70 is retail price, if later institutional price less than retail price, bal will refund)
EPS: RM0.10
P/E: 17X
NA after IPO: RM0.85
Debt ratio: 0.753 (Debt: RM3.071 bil, Asset: RM4.077 bil)
Dividend policy: 70% dividend if company profitable
Business (Power & Water)
Power generation, water supply services (operate water & wastewater treatment, water utility assets)
Main Revenue
Power:22.7%
Environment: 77.3%
Past Financial Proformance
2012: RM1.158 bil (EPS:RM0.10)
2013: RM1.199 bil (EPS:RM0.09)
2014: RM1.294 bil (EPS:RM0.10)
2015 (6 mth): RM0.628 bil (EPS:RM0.05)
After IPO Sharesholding
Tan Sri Hamdan: 31.6%
Tan Sri Azman: 5%
Use of fund
Repayment of RPI's outstanding : 34.51%
Repayment of Sukuk: 15.69%
Settlement of RWT (cayman) Acquisition: 19.61%
Working Capital: 18.43%
Investment into RWT (Cayman) water business in China: 11.76%
Conclusion
Good thing is:
1. 77.3% of the comapany income come from enviroment (water section), which is less sensitive to raw material cost. This will provide partial stable income to the company.
2. Debt ratio still consider healthy. Not more than their assets.
3. The concept of the company business is to provide a recession prove income (utilities).
4. After the IPO, Tan Sri Hamdam still holding 31.6% of the company shares.
The bad things:
1. 69.81% is repayment of outstanding (in other similar meaning is debt).
2. The PE17 is consider high, because our country PE is only PE16.
Conclusions
IPO to pay debt is always not a good thing for investor. Try to AVOID is IPO. However, if the IPO able to drop until PE13 (RM1.30) we can consider to buy some to invest, who's know one day might become like tenaga.
The IPO price RM1.70 is consider very expensive, because we don't want our money to help them pay debt. RM1.30 is just fair.