IPO

Monday, February 12, 2018

WEGMANS Holding Berhad

IPO (Rating 2.25 star out of 5.0)
Copyright@http://lchipo.blogspot.com/


Date
Open to apply: 13/02/2018
Close to apply: 22/02/2018
Listing date: 06/03/2018

Share Capital
Market Cap: RM145.000 mil
Shares Issue to sell: 53 mil shares (Open to public: 100 mil shares)
Enlarged Issued Shares: 500 mil shares

Business
Design, Manufacture, & sale of home furniture products.

Market (Revenue from)
Japan: 21.38%
US: 18.96%
Australia: 15.69%
UK: 12.37%
other 45 countries: 31.6%

Fundamental
Market: ACE Market
Price: RM0.29 (eps til sep: 0.0289)
P/E & ROE: PE9.42, ROE26.77%
Cash & fixed deposit after IPO: RM0.022 per shares
NA after IPO: RM0.12
Total Debt to current asset after IPO: 0.40 (Debt: 38.374 mil, Non-Current Asset: 62.619 mil, Current asset: 33.305 mil)
Dividend policy: -

Competitor PAT margin & ROE%
Wegmans: 18.24%, 26.77%
Latitude: 8.79%, 12.32%
Liihen: 11.73%, 27.69%
Poh Huat: 8.74%, 19.23%
Jaycorp: 8.58% 15.56%
SYF: 7.7%, 10.88%
Homeriz: 18.28%, 23.32%

Financial
Trade Receivable: 18 days
Trade payable: 62 days
Ave inventory turover: 70 days

Past Financial Proformance (Revenue, EPS before IPO)
2017 (until sep): RM63.372 mil (eps: 0.0289)
2016: RM85.636 mil (eps: 0.0383)
2015: RM66.216 mil (eps: 0.0324)
2014: RM39.416 mil (eps: 0.0075)

Net Profit Margin
2017: 18.24%
2016: 17.92%
2015: 17.87%
2014: 19.56%

After IPO Sharesholding
Chan Wan Seong: 0.02%
Keh Wee Kiet: 35%
Collin Law Kok Lim: 35%
Maziah binti Md Yamin: 0.02%
Chan Foong Ping: 0.02%

Director Remuneration (from gross profit 2017)
Chan Wan Seong: RM0-50k
Keh Wee Kiet: RM350k-400k
Collin Law Kok Lim: RM350k-400k
Maziah binti Md Yamin: RM0-50k
Chan Foong Ping: RM0-50k
Total director remuneration from gross profit: 2.8% - 3.8%

Use of fund
New factories,office,showroom,hostel: 37.93%
New machineries & equipment: 37.93%
Working capital: 12.07%
Listing expenses: 12.07%

Conclusion
Good thing is:
1. PE9 & ROE26 is acceptable level.
2. Revenue increasing over 4 years.
3. Founder still is the biggest sharesholder.
4. Director fee is acceptable.

The bad things:
1. Listing on ACE market.
2. Current strong MYR will effected the company sale.
3. Consider in a mature industry.
4. Too many competitor in the same industry.

Conclusions
Is a good IPO, but the timing is not encourage. The strong MYR, will effect revenue heavily.
Investor might have chance to buy lower then IPO price.

IPO Price: RM0.29
Good time: RM0.40 (PE13)
Bad time: RM0.18 (PE6)

Thursday, February 8, 2018

QES Group Berhad

IPO (Rating 2.25 star out of 5.0)
Copyright@http://lchipo.blogspot.com/



Date
Open to apply: 08/02/2018
Close to apply: 23/02/2018
Listing date: 08/03/2018

Share Capital
Market Cap: RM144.078 mil
Shares Issue to sell: 227.492 mil shares (Open to public: 151.661 mil shares)
Enlarged Issued Shares: 758.308 mil shares

Business
Distibution manufacturing & provision of enginnering services of inspection, test, measuring, analytical & automated handling equipment.

Market (Revenue from)
Msia: 47.1%
Asean: 50.7%

Fundamental
Market: ACE Market
Price: RM0.19 (eps: 0.0156)
P/E & ROE: PE9.13, ROE21.6%
Cash & fixed deposit after IPO: RM0.05 per shares
NA after IPO: RM0.09
Total Debt to current asset after IPO: 0.526 (Debt: 50.023 mil, Non-Current Asset: 28.150 mil, Current asset: 94.989 mil)
Dividend policy: -

Competitor PE & ROE
QES: PE9.13, ROE21.6%
Vitrox: PE33.74, ROE25.74
Elsoft: PE22.45, ROE29.44
Vis: PE11.94, ROE21.46
MMSV: PE11.84, ROE35.98

Competitor PAT margin
QES: 7.4%
Elsoft: 48.9%
MMSV: 26.8%
Vis: 15.6%
Vitrox: 27.7%

Financial
Trade Receivable: 65
Trade payable: 75

Past Financial Proformance (Revenue, EPS before IPO)
2017 (until sep): RM139.634 mil (eps: 0.0156)
2016: RM137.285 mil (eps: 0.0125)
2015: RM128.000 mil (eps: 0.0094)
2014: RM105.381 mil (eps: 0.0069)

Net Profit Margin
2017: 9.1%
2016: 7.4%
2015: 5.8%
2014: 5.2%

After IPO Sharesholding
Chew Ne Weng: 41.1%
Liew Soo Keang: 28.9%

Director Remuneration (from gross profit 2017)
Adnan Bin Zainol: RM0-50k
Chew Ne Weng: RM1.05 mil - 1.1 mil
Liew Soo Keang: RM0.95 mil - 1.0 mil
Chia Gek Liang: RM0-50k
Hoh Chee Mun: RM0-50k
Total director remuneration from gross profit: 2.98% - 3.30%

Use of fund
Product development: 16.8%
Working capital: 11.3%
Pay debt: 24.3%
Capital expenditure: 37.2%
Listing expenses: 10.4%

Conclusion
Good thing is:
1. PE9 & ROE21 with acceptable level.
2. Revenue increasing over 4 years.
3. Founder still is the biggest sharesholder.
4. Director fee is acceptable.
5. Consider in a sunrise industry.

The bad things:
1. Listing on ACE market.
2. Net profit margin is less then 15%.
3. IPO fund 24.3% use to pay debt.
4. Competitor have better ROE, better PAT margin.

Conclusions
It is a meet fair value IPO. However, QES is not the best choice compare among their competitor.

IPO Price: RM0.19
Good time: RM0.27 (PE13)
Bad time: RM0.145 (PE7)