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Date
Open to apply: 18/02/16
Close to apply: 25/02/16
Listing date: 08/03/16
Fundamental
Market: Main Market
Price: RM0.65
EPS: RM0.0395 (at 31/08/2015)
P/E: 10.96x
Cash & fixed deposit after IPO: RM0.33 per shares (RM171.543 mil, 505mil shares)
NA after IPO: RM0.57
Debt ratio: 0.6677 (Debt: RM579.092 mil, Asset: RM867.177 mil)
Dividend policy: no formal dividend
Business (Distribution & Manufacturing)
Distribution: Supplier of Building Materials, Mixed Conrete, Bricks & others.
Manufacturing: Wire Mesh, AAC blocks, jacking pipes, & others.
Main Revenue
Mainly in Malaysia.
Past Financial Proformance
2011: RM1.014 bil (EPS:RM0.0378)
2012: RM1.046 bil (EPS:RM0.0684)
2013: RM1.220 bil (EPS:RM0.0582)
2014: RM1.219 bil (EPS:RM0.0597)
2015: RM0.816 bil (EPS:RM0.0395, ***As until 31/08/2015)
After IPO Sharesholding
Chiau Beng Teik, Chiau Haw Choon, Wong Mee Leng (3 of them use Divine Invention to hold Chin Hin shares) : indirect holding 60%
Director Salary (2016)
***For estimation only for full year revenue to calculate director salary, Revenue 2015 estimate RM1.225 bil, Profit after tax 2015 Rm30mil)
Datuk Chiau Beng Teik: RM150k-200k (Revenue:0.00016%, PAT: 0.0067%)
Chiau Haw Choon: RM1.15mil-1.2mil (R:0.00098%, PAT:4%)
Lee hai Peng: RM500k-550k (R:0.00045%, PAT:0.0183%)
Datuk Dr Nik Norzul Thani: RM100-150k (R:0.00012%, PAT:0.005%)
Yeoh chin Hoe: RM0-50k (R: 0.00004%, PAT:0.00013%)
Datuk Cheng Lai Hock: RM0-50k (R: 0.00004%, PAT:0.00013%)
Use of fund
Purchase new plant, equipment & machineries: 36.5%
Pay Debt: 36.5%
Working Capital: 17.2%
Listing Expenses: 9.8%
Conclusion
Good thing is:
1. Director hold 60% of the company shares & director is the founder of the company.
2. After IPO cash in hand is RM0.33
3. Debt ratio still in healhty level, PE is 10.96x, & NA after IPO 0.57 near to IPO price 0.65.
4. Listing in main board.
The bad things:
1. 36.5% IPO fund use to pay debt.
2. Slow down of property, might slow down the company business.
3. Income mainly from Malaysia (have some income from Singapore & Hong Kong, but not much).
4. EPS from 2011-2015 is stable now without good improvement (slow down from 2013-2015, might because of slow down in property industry).
Conclusions
Overall, this is not a expensive company, since our country PE is 15.6x, & in the enviroment of property slow down in 2015 still able to mainatin PE10.96x, which is good.
One sad point is using IPO fund to pay debt.
Price at PE15.6x : RM0.92
Discount 20%-25% to PE15.6x: RM0.0.69-RM0.74 (do not buy any price above this level)