IPO (Rating 3.25 star out of 5.0)
Copyright@http://lchipo.blogspot.com/
Date
Open to apply: 20/12/2016
Close to apply: 28/12/2016
Listing date: 10/01/2017
Core Business, Geo, Customers, Supplier
Business: Glove Dipping line 97.78% (design, fabrication, installation, tesing, commissioning),upgrading & modification works 1.42% & supply part 0.8%
Geo: M'sia 73.62%, Thai 25.86%, Indo 0.52%
Customer 2016 (top3): Central Medicare S/B (33.3%,6yrs), Cardinal Health 222 Thai ltd (25.8%,2yrs), Green Prospect S/B (19.1%,7yrs)
Supplier (top3): Choo Bee Hardware S/B (12.8%,7yrs), Yoshiki Solution Thai Ltd (12.7%,1yr), Yankong Stainless S/B (10%,6yr).
Fundamental
Market: Ace Market
Price: RM0.45 (par value:RM0.10)
Intrinsic Value: RM0.344
EPS: RM0.0235 (7mth)
P/E: 11.25 (forecast 12month EPS 0.40)
Cash & fixed deposit after IPO: RM0.095 per shares
NA after IPO: RM0.19
Dividend policy: Does not fixed any % in dividend policy
Financial Ratio
Trade Receivables turnover days: 46
Trade Payable turnover days: 129
Inventory turnover days: 18
Current Ratio: 1.98
Gearing Ratio: 0.04
Debt ratio after IPO: 0.386 (Debt: RM32.618 mil, Total Asset: RM84.411 mil)
Past Financial Proformance (Revenue)
2013: RM 46.042 mil (EPS: 0.0377)
2014: RM 43.568 mil (EPS: 0.0324)
2015: RM 75.697 mil (EPS: 0.0460)
2016: RM 47.692 mil (EPS: 0.0235) **for 7month
After IPO Sharesholding
Chan Yoke Chun: 35.09%
Wong Kok Wah: 36.52%
Director Remuneration
Wong Kok Wah: 700k-750k
Chan Yoke Chun: 700k-750k
other 2 director: 50k-100k
other 1 director: 0-50k
***total director fee from gross profit 2015: 9.85%-11.50%
Use of fund
Capital Expenditure: 50.52%
R&D expenditure: 8.42%
Working Capital: 27.59%
Listing Expenses: 13.47%
***Factory utilasation rate:84.62% (2016), 81.42% (2015), 72.73% (2014), 90.91% (2013)
Conclusion
Good thing is:
1. Revenue still growing & around PE11.
2. Debt ratio still healthy.
3. Co-founded WKW still remain as major sharesholder.
4. Big potion of IPO fund use to develop business (buid new factory).
The bad things:
1. listing in ACE market.
2. Price is 30% above intrinsic value.
3. Director fee is too high.
Conclusions
Overall is a above average IPO & near to fair IPO. Still able to see the true value of IPO. However, director fee might quite high.
IPO Price at RM0.45 (PE11.25)
Good time : RM0.60 (PE15)
Bad time : RM0.28 (PE7)