IPO (Rating 2.75 star out of 5.0)
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 28/04/16
Close to apply: 06/05/16
Listing date: 18/05/16
Fundamental
Market: Ace Market
Price: RM0.80 (par value:RM0.10)
EPS: RM0.051 (7 mth)
P/E: 9.72x (EPS full year is cal by EPS2015 90% +7mth divided by 19mth)
Cash & fixed deposit after IPO: RM0.13 per shares (Cash 50.745mil, Debt 39.202 mil)
NA after IPO: RM0.37
Debt ratio: 0.346 (Debt: RM39.202 mil, Asset: RM143.913 mil)
Dividend policy: 30% of annual net profit
Business
Manufacture of Bluetooth devices
Manufacture of other electronic & preision
Major Customer & Supplier
Major Cutomers: 89.9% (Plantronic 42.4%, Jaybird 43.6%, Sony 21.4%, Canin Opto 0.4%)
Majot Supplier: 45.5% (Cotron Corp 19.9%, WPG Soutth Asia 13.8%, SDKM 11.8%), mostly import.
Main Revenue
North America: 90.85%
Europe: 2.55%
Australia & New Zealand: 0.05%
Asia: 6.02%
Africa: 0.015%
Malaysia: 0.515%
Past Financial Proformance (Revenue)
2013: RM78.559 mil (EPS RM-0.835)
2014: RM234.212 mil (EPS RM0.047)
2015: RM192.518 mil (EPS RM0.088)
2016(7month): RM145.654 mil (EPS RM0.051)
After IPO Sharesholding
James Lim, Joshua Lim, Joel Lim: 67.7%
Director Salary (2016)
Chia Chee Hoong: RM0-50k
James Lim: RM1.5mil-1.55mil
Joshua Lim: RM0-50k
Low Teng Lum: RM0-50k
Leow Chan Khiang: RM0-50k
***summary total directors salary from gross profit & other income: 5.5%-6.4%
Use of fund
Repayment debt: 13.6% (Bad)
Capital Expenditure: 40.1% (Good)
R & D: 13.1% (Normal)
Working Capital: 26.8% (Normal)
Listing Expenses: 6.4% (below average)
Conclusion
Good thing is:
1. EPS growing pass 3 years.
2. Benefit from USD (if USD strengthen).
3. Estimated PE is 9.72 (good earning for EPS)
4. Debt ratio still in healthy level.
5. 80% IPO fund use to business growth.
The bad things:
1. CEO not Co-founder.
2. Listing in ACE market (requirement listing is more easy than main market, mean more risk involve).
3. Total director salary is only average, but CEO salary is super high.
4. Margin earning will reduce if USD is weaken.
5. Heavily focus on major customer.
6. 13.6% IPO fund use to pay debt.
Conclusions
Overall is above average/normal company. Having good earning with PE9.72x is attractive, however investor should take consideration on USD weaken effect.
2015 sales is lower than 2014, but earning per shares in increased, which mean we should take consideration on USD at weaken period how this company is sulvive. By using the USD rate 2014 (before USD go up) PE is 17.
IPO Price at RM0.80
Good time : RM1.056 (PE15 discount 20%)
Bad time : RM0.56 (PE15 discount 20%)