HSS Engineers Berhad

IPO (Rating 2.75 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 29/06/2016
Close to apply: 22/07/2016
Listing date: 10/08/2016

Fundamental
Market: Ace Market
Price: RM0.50 (par value:RM0.10)
EPS: RM0.0317
P/E: 15.77
Cash & fixed deposit after IPO: RM0.58  per shares (Cash RM 37.033 mil, Debt RM 37.362 mil)
NA after IPO: RM0.20
Debt ratio: 0.37 (Debt: 37.362 RM mil, Asset: RM 102.010 mil)
Dividend policy: Interim & final dividend basic.

Core Services
Engineering Design:38.1%
Contruction supervision: 35.1%
Project Management: 23.5%
BIM services: 3.3%

Market Discipline
Railway & Transit: 57%
Highway: 18%
Building & township: 12%
Port: 7%
Property: 3%
Mechinical & Engineering: 2%
Power & water: 1%

Sources of Project Funding
Gov: 71%
Private Developer: 3%
PFI/PPP/BOT: 26%

Major Customer
Prasarana Msia Bhd: 29%
Mass Rapid: 22%
Unit Perancang Ekonomi Negeri Penang: 7.7%
PLUS Berhad: 4.5%
Wesrports: 4.0%

Geographical Market (2015)
Malaysia: 97.5%
India, Brunie, Middle East: 2.5%

Past Financial Proformance (Revenue)
2013: RM101.449 mil (EPS:0.021)
2014: RM104.575 mil (0.0286)
2015: RM121.503 mil (0.0317)
Unbilled order book: RM365.9 mil (2-5 years)

After IPO Sharesholding
Datuk Ir.Kunasingam: 31.3%
Vanessa A/P Santhakumar: 31.3%

Director Salary (from gross profit 2015)
Dato' Mohd Zakhir Siddiqy: RM50,001 - RM100k
Datuk Ir. Kunasingam: RM2 mil - RM2.05 mil
Dato' Ir. Nitchiananthan: RM1.115 mil - RM1.2 mil
Dato' Ir. Khairudin: RM50,001 - RM100k
Mohan A/L Ramalingam: RM50,001 - RM100k
Foo lee Khean: RM50,001 - RM100k
Ir.Sharifah Azlina: RM700k - RM750k
***summary total directors salary from gross profit & other income: 9.94% - 10.8%

Use of fund
Expansion: 75.2% (into India 47%)
Repay Debt: 12.6%
Working Capital: 2.2%
Listing expenses: 10.0%

Conclusion
Good thing is:
1. Co-founder still with the company (Datuk Ir.Kunasingam)
2. Expand into India (reduce too depend on M'sia gov for project)
3. Debt ratio still healthy.
4. Over 3 year revenue increasing.

The bad things:
1. PE15.77 is consider just Fair.
2. Business too depend on Gov.
3. Listing in ACE market (less regulated, & less strict to listing compare to main board)
4. 12.6% use to pay debt.
5. Director fee is expensive.

Conclusions
Overall is a normal IPO. Price is at fair value. Is good effort to the company expend into India to reduce over depend on local gov project.
For fist day IPO, it might have opportunities to make profit.


IPO Price at RM0.50
Good time : RM0.57 (PE18)
Bad time : RM0.32 (PE10)

Dancomech Holdings Berhad

IPO (Rating 2.50 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 23/06/2016
Close to apply: 12/07/2016
Listing date: 21/07/2016

Fundamental
Market: Main Market
Price: RM0.75 (par value:RM0.40)
EPS: RM0.09 (2015)
P/E: 8.33
Cash & fixed deposit after IPO: RM0.218 per shares (Cash RM32.548 mil, Debt RM19.259 mil)
NA after IPO: RM0.61
Debt ratio: 0.175 (Debt: RM19.259 mil, Asset: RM109.999 mil)
Dividend policy: 30% of annual net profit (not fixed)

Business
Trading & distribution of third party brands & own brands of PCE, MPTE, measurement intrusment of water & sewrage industry.

Major Customer & Supplier
Major Cutomers: KNM (5.73%), Desmet Ballaestra (9.49%)
Majot Supplier: Neway Valve (12.99%), Laser GmbH % Co. (10.43%), British Rototherm (10.34%)

Main Revenue
Palm Oil & Oleochemicals: 59.13%
Oil & Gas, and Petrochemicals: 13.7%
Water Treastment & sewerage: 4.97%
Others: 22.2%

Geographical Market
Malaysia: 78.86%
Indonesia: 19.71%
Others: 1.43%

Past Financial Proformance (Revenue)
2012: 65.566 mil
2013: 83.190 mil
2014: 79.001 mil
2015: 68.253 mil

After IPO Sharesholding
Aik Swee Tong & Aik Cwo Shing (both through ABC equity): 41.57%
Aik family: 18.33%

Director Salary (2016)
Datuk Zainal Abidin Bin Ujud: Up to RM50k
Aik Swee Tong : RM600k - RM650k
Aik Cwo Shing: RM650k - RM700k
Gonf wooi Teik: up to RM50k
Marzuki bin Abd Rahman: up to RM50k
Lee Chen Yow: up to RM50k
Sharon Lee Ching Yee: up to RM50k
***summary total directors salary from gross profit & other income: 5.30% - 6.78%

Use of fund
Pay Debt: RM4.557 mil (25.32%)
Purchase of office cum store: RM6.5 mil (36.11%)
Purchase of equipment: RM1 mill (5.55%)
Working Capital: RM2.743 mil (15.24%)
Listing Expenses: RM3.2 mil (17.78%)

Conclusion
Good thing is:
1. PE is 8.33
2. Debt ratio is healthy.
3. Co-founder still manage the company.
4. Product is niche market.
5. IPO price is near to net asset.

The bad things:
1. Lisitng Expenses is too expensive.
2. 25.32% is use to pay debt.
3. Revenue past 3 years continue to drop.
4. Direcetor fee is expensive.

Conclusions
Overall is only an average company.

IPO Price at RM0.75
Good time : RM1.08 (PE12)
Bad time : RM0.54 (PE6)