IPO (Rating 3.0 star out of 5.0)
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Date
Open to apply: 04/03/16
Close to apply: 14/03/16
Listing date: 29/03/16
Fundamental
Market: Main Market
Price: RM1.10 (par value:RM0.20)
EPS: RM0.0589
P/E: 18.67x (SEM 7-eleven PE30.48)
Cash & fixed deposit after IPO: RM0.33 per shares (RM38.324 mil, mil shares)
NA after IPO: RM0.44
Debt ratio: 0.442 (Debt: RM43.95 mil, Asset: RM137.731 mil)
Dividend policy: no formal dividend
IPO Price
***Public/Retail IPO price is RM1.10, however if institutional IPO price is lesser than retail price, it will refund the difference to retail.
Business (Investment Holding)
Press & Convenience Retailing
-myNEWS.com, newplus, MAGBIT, THE FRONT PAGE, WHSmith.
Main Revenue
Mainly in Malaysia.
Revenue Segment
Tobacco: 35.1%
Food & beverage: 37.2%
Print media: 9.6%
Non-food: 4.8%
Consumer Service:1.4%
Advertising: 8.5%
Sale of related companies: 0.9%
Past Financial Proformance
2013: RM157.9 mil (EPS:RM0.0778)
2014: RM182.4 mil (EPS:RM0.0542)
2015: RM217.5 mil (EPS:RM0.0589)
After IPO Sharesholding
DANG TAI WEN, DANG TAI HOCK, DANG TAI LUK: 68.8%
Director Salary (2016)
DTL: 500K-550K (Revenue: 0.25%, PAT: 4%)
DTW: 450K-500K (Revenue: 0.22%, PAT: 3.7%)
DTH: 200K-250K (Revenue: 0.11%, PAT: 1.85%)
Use of fund
Capital Expenditure: 56.4%
Working Capital: 36.3%
Listing Expenses: 7.3%
Conclusion
Good thing is:
1. No IPO use to pay debt, all IPO fund use to it business.
2. Founder still as the major sharesholder (DTL).
3. Debt ratio is in healthy level.
4. Competitor PE30 (7-Eleven, SEM), Malaysia country PE15.5
5. Revenue is increase over the 3 years, however EPS growth rate is slowing down.
The bad things:
1. PE18 is consider high PE, however compare to its competitor 7-eleven (SEM), Bison is more attractive.
2. Having 35.1% revenue come from tobacco (tobacco in Malaysia is always be more expensive over the time).
3. NTA is only 40% from the IPO price.
Conclusions
Overall, this is consider a bit expensive company on the company IPO price. Fair value should be RM0.91
over the years, it main business myNEWS.com have growth fast in major city, & it will expected to slow down. If take consideration on future growth of the company, PE18 consider fair (as smart investor, we should always buy company that undervalued, but not just fair).
Price at PE15.5x : RM0.91