IPO (Rating 2.5 star out of 5.0)
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Date
Open to apply: 30/12/2016
Close to apply: 19/01/2017
Listing date: 08/02/2017
Core Business, Geo, Customers, Supplier
Business: Enginnering solution on O&G & power generation.
Geo (operating facilities): Malaysia, Indonesia, Bahrain, UAE, UK
Customer 2016: Petronas 23.14%, Sarawak shell bhd 3.36%, Energy Engineering & Services 2.53%, Energy Machine Services L.L.C 1.02%
Supplier: Technorette sdn bhd 14.38%, FRZ Scientific 10.95%, Qatar Enginerring & Construction 10.02%
Fundamental
Market: Main Market
Price: RM1.50 (par value:RM0.50)
Intrinsic Value: RM1.48 (forcase by 2016 EPS0.152)
EPS: RM0.152
P/E: 9.87
Cash & fixed deposit after IPO: RM0.38 per shares
NA after IPO: RM0.76
Dividend policy: at least 30% on PAT
Financial Ratio
Trade Receivables turnover days: 95.70
Trade Payable turnover days: 70.81
Inventory turnover days: 62.82
Current Ratio: 1.25
Gearing Ratio: 0.82
Debt ratio: 0.19 (Debt: RM0.861 bil, Total Asset: RM1.885 bil)
Past Financial Proformance (Revenue)
2013: RM 536.195 mil (EPS: 0.95)
2014: RM 755.768 mil (EPS: 1.03)
2015: RM1402.942 mil (EPS: 2.52)
2016 (6 mths): RM 911.726 mil (EPS: 1.52)
After IPO Sharesholding
Hj.Abdul Kadier: 22.22%
Dato' Awang Daud: 14.17%
Dato' Karim: 28.02%
Director Remuneration (from gross profit 2015)
Hj.Abdul Kadier: RM350k-400k
Dato' Awang Daud: RM900k-950k
Dato' Karim: RM1150k-1200k
Dato' Mohamed Nor: RM150k-200k
others 3 director: RM100k-150k
***total director fee from gross profit: 1.23%-1.38%
Use of fund
Expansion of business & operation facilities: 73.69%
Working capital: 7.2%
Repayment borrowing: 14.74%
Listing expenses: 4.37%
Conclusion
Good thing is:
1. PE around 10
2. Intrinsic value is near to IPO price (earning power).
3. Debt ratio still acceptable.
4. Revenue still growing.
The bad things:
1. O&G still industry still very depend on the crude oil price.
2. Receiveable turnover days quite high.
3. Director fee is look lower in percetage but the amount pay out is very heavy if they unable to sustain their revenue.
4. 14.74% IPO use to pay debt.
Conclusions
The timing of IPO might not the best for the company since crude oil price still in low level. Might not able to provide good return in short-term.
IPO Price at RM1.50 (PE9.87)
Good time : RM1.82 (PE12)
Bad time : RM0.76 (PE5)