IPO (Rating 3.75 star out of 5.0)
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 13/12/2016
Close to apply: 19/12/2016
Listing date: 29/12/2016
Industrial product (Core Business, Geo, Customers, Supplier)
Business: Percision engineering parts in semiconductor industry
Geo: - does not decladed
Major Customer: Broadcom Corporation 47.7% (US- having 11 years of business relationship)
Major Supplier: ADE Technologies Pte Ltd 38.26% (S'pore), Gaffoglio 6.86% (US), Innovation semicon 6.10% (US).
Fundamental
Market: Main Market
Price: RM0.54 (par value:RM0.10)
Intrinsic Value: RM0.4099 (forcase by 2016 EPS 0.0448)
EPS: RM0.0448
P/E: 12.054
Cash after IPO: RM0.08319 per shares
NA after IPO: RM0.16
Dividend policy: at least 30% dividend profit after tax
Financial Ratio
Trade Receivables turnover days: 61
Trade Payable turnover days: 53
Inventory turnover days: 41
Current Ratio: 9.92
Debt ratio: 0.0787 (Debt: RM5.198 mil, Total Asset: RM66.087 mil)
Past Financial Proformance (Revenue)
2014: RM 30.204 mil (EPS: 0.0256), profit margin 41.96%
2015: RM 34.370 mil (EPS: 0.0359), profit margin 46.14%
2016: RM 44.108 mil (EPS: 0.0448), profit margin 47.06%
After IPO Sharesholding
FoundPac Holdings: 64.32%
(Lee Chun Wah, Tan Sin Khoon, Ong Choon Heng)
Director Remuneration (from gross profit 2016)
Tan Cheik Eaik: RM0-50k
Lee Chun Wah: RM750k-800k
Tan Sin Khoon: RM750k-800k
Ong Choon Heng: RM350k-400k
Chan Bee Cheng: RM0-50k
Teoh Lay Fung: RM0-50k
Total director fee: 8.91%-10.12%
Use of fund
Purchase of property, plant & equipment: 37.04%
Overseas expansion: 18.52%
Working Capital: 16.66%
D&D Expenditure: 13.89%
Listing Expenses: 13.89%
Conclusion
Good thing is:
1. 3 years revenue, EPS, profit margin, continue perform better.
2. Have at least 30% dividend PAT policy.
3. Debt is at very minimum compare to asset.
4. Cash Flow statement showing perform better over pass 3 years.
5. IPO fund use to expend business.
6. At least having 47.7% revenue is from USD.
7. Business (Percision for semiconductor) product still in industrial growth stage.
The bad things:
1. Director fee is too expensive 8.91%-10.12%.
2. Over depend on single major customer (47.7% Broadcom Corp)
3. 31% expensive compare intrinsic value.
Conclusions
Is a good IPO. But the 2 major weakness is director fee too high, & over depend on one single customer.
By forecast on it growing business, it should able to perform better for coming years, since weak MYR will increase their product demand.
IPO Price at RM0.54 (PE12)
Good time : RM0.675 (PE15)
Bad time : RM0.35 (PE8)