IPO

Tuesday, November 29, 2016

Rhone Ma Holding Berhad

IPO (Rating  4.0 star out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 29/11/2016
Close to apply: 06/12/2016
Listing date: 19/12/2016

Core Business, Geo, Customers, Supplier
Business: Animal Health Solution product (78.42%), Distribution &  supply of food ingredients (21.58%)
Geo: Malaysia (97.59%), Oversea (2.41%)
Customer 2016: one major customer (9.94%), & others 660 customer list since 2005.
Supplier: Merial Group (43.65%), Roquette Group (22.97%)

Fundamental
Market: Main Market
Price: RM0.75 (par value:RM0.50)
Intrinsic Value: RM0.7752 (forcase by 2016 EPS 0.09)
EPS: RM0.09
P/E: 8.33
Cash & fixed deposit after IPO: RM0.09 per shares
NA after IPO: RM0.56
Dividend policy: Does not fixed any % in dividend policy

Financial Ratio
Trade Receivables turnover days: 77
Trade Payable turnover days: 55
Inventory turnover days: 99
Current Ratio: 3.88
Gearing Ratio: 0.09
Debt ratio: 0.19 (Debt: RM21.936 mil, Total Asset: RM114.308 mil)

Past Financial Proformance (Revenue)
2013: RM 83.715 mil (EPS: 0.08)
2014: RM 91.528 mil (EPS: 0.11)
2015: RM106.735 mil (EPS: 0.08)
2016: RM 77.968 mil (EPS: 0.09)

After IPO Sharesholding
Dr.Lim, Foong Kam Weng, Dr.Yip (all under BASB): 51.12%
Others Directors: 5.22% (total 15.66% for 3 directors) & 3.73% (1 director)

Director Remuneration (from gross profit 2015)
Dato' Hamzah: 50k-100k
Dr.Lim: 750k-800k
Foong Kam Weng: 550k-600k
Dr.Yip: 400k-450k
Others (3 director): 0-50K
***total director fee from gross profit 2015: 5.17%-6.2%

Use of fund
Capital Expenditure: 77.55% (New GMP-Compliant Plant, Puchase Machineries & Equitment, Contruction of warehouse)
Working Capital: 6.62%
Listing Expenses: 15.83%

Conclusion
Good thing is:
1. PE8.33 (Profitable PE area 7-10)
2. Only one major customer & less than 10%.
3. Price is near to NA & par Value.
4. Profit is growing.
5. IPO price is around intrisic value
6. 84.17% of IPO fund use to expand business.

The bad things:
1. High depend of 2 major supplier.
2. Director fees is a bit high (good company should be less than 3%).
3. Listing expenses is high (normally around 10%)

Conclusions
This is what we want IPO without paying debt & mainly to expand business. Worth to invest & must keep track on every quarter result if hold more more longer period.

IPO Price at RM0.75 (PE8.33)
Good time : RM1.35 (PE15)
Bad time : RM0.63 (PE7)