IPO (Rating 3.5 star out of 5.0)
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 29/03/16
Close to apply: 05/04/16
Listing date: 19/04/16
Fundamental
Market: Main Market
Price: RM1.42 (par value:RM0.50)
EPS: RM0.092
P/E: 15.434x
Cash & fixed deposit after IPO: RM0.34 per shares (Cash 65mil, Debt 20.9mil)
NA after IPO: RM0.80
Debt ratio: 0.147 (Debt: RM25.92 mil, Asset: RM176.58 mil)
Dividend policy: 40% PAT
Business
PLeather 100%: Car seat cover, automotive leather, car door trim cover...
PAviation 60%: Aircraft leather seat...
EEmpire 100%: Retail outlet (smart fit, quick fit, car accessory cover)
Main Revenue
Malaysia: 88.71%
Overseas: 11.29% (Netherlands, Australia, Singapore,USA, New Zealand & other less than 1%)
Business Shares
***Based on number of installed-leather-upholstery passenger vehicle units for OEM & PDI market segment
2011: 36.3%
2012: 38.4%
2013: 57.8%
2014: 65.2%
2015: 67.7%
Major Customer: Toyota 34.33%, Fuji 22.99%, Tan Chong 12.46%, Proton 3.86%, Mitsubishi 2.48%
Past Financial Proformance
2012: RM62.1 mil (EPS: RM0.03)
2013: RM66.1 mil (EPS:RM0.0561)
2014: RM99.5 mil (EPS FPE 14:RM0.0671)
2015: RM129.5 mil (EPS FPE15:RM0.0920)
After IPO Sharesholding
Datuk Teoh Hwa Cheng (founder) & Datin Sam Yin Thing : 45.58% (under MRZ)
Director Salary (2016)
Dato' Mohamed Suffian : 50K-100K
Datuk Toeh Hwa Cheng: 550K-600K
Datin Sam Yin Thing : 200K-250K
Tan jin Sun : 350k-400k
Sam Chee Keng : 300k-350k
Dato' Dr Norraesah : 50k-100k
Leong Kam Weng : 50k-100k
***summary salary from Revenue: 1.19%-1.31% (FYE 2015)
Use of fund
Working Capital: 39.74% (Normal)
Repayment debt: 25.20% (Bad)
Puchase machineries: 11.12% (Good)
Contruction add production floor: 7.37% (Good)
Open Retail Outlet: 5.52% (Good)
Establisment business at Thailand: 2.21% (Good)
Expansion of PAviation's business: 1.47% (Good)
Listing Expenses: 7.37% (Normal)
Conclusion
Good thing is:
1. Cash is more than debt after IPO (nett cash company), & debt ratio is low.
2. Founder still is the director of Pecca & now he only 48 years old.
3. Revenue increase every year since 2012 & EPS as well.
4. Largest market shares in Malaysia.
The bad things:
1. PE15.43 consider not expensive not cheap.
2. 25.2% IPO fund use to pay debt.
3. Director fee around 1% from total revenue (expensive).
Conclusions
Overall, it is good company. With the PE15.43 is not expensive but also not cheap, but after add in the potential of growing of business it should be more valuable in future.
Price at RM1.42 should be fair.
Good timing: RM1.64 (add 15%, PE17.8)
Bad timing: RM1.065 (discount 25%, PE11.57)