DPI Holdings Berhad

IPO Rating (1.75 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 27/11/2018
Close to apply: 18/12/2018
Listing date: 07/01/2019

Share Capital
Market Cap: RM121.683 mil
Shares Issue to sell: 126.560 mil shares
Enlarged Issued Shares: 486.731 mil shares

Business
Manufaczture Aeosol product- DPI, Achor, Kromoto
Private label manufacturing services.

Market sizes (2013-2017 CAGR)
Msia: 8.1% (ave one year 1.6% per yr)
Japan: 3.9%
Australia: 4.1%
New Zealand: 4.0%
Indonesia: 3.2%
Vietnam: 3.2%
Myanmar:4.2%

Revenue on Geo (2018)
Msia: 81.74%
Outside Msia: 18.26%

Fundamental
Market: Ace Market
Price: RM0.25 (eps: RM0.0163)
P/E & ROE: PE15.34, ROE9.3%
Cash & fixed deposit after IPO: RM0.097 per shares
NA after IPO: RM0.13
Total debt to current asset after IPO: 0.12  (Debt: 7.881 mil, Non-Current Asset: 5.724 mil, Current asset: 65.656 mil)
Dividend policy: -

Financial
Trade Receivable: 58 days
Trade payable: 69 days

Past Financial Proformance (Revenue, EPS)
2018: RM50.294 mil (eps: 0.0163)
2017: RM49.360 mil (eps: 0.0258)
2016: RM46.923 mil (eps: 0.0206)

Net Profit Margin
2018: 11.86% (after exclude one-off asset dispose gain)
2017: 18.82%
2016: 15.81%

After IPO Sharesholding
Peter Chai: 56.98%
Adam Chai: 17.02%
Datuk Seri Nurmala: 0.04%
Fong Yoo Kaw: 0.04%
Lau Kok Hiyong: 0.04%

Director Remuneration for FYE2019 (from gross profit 2018)
Peter Chai: 806k
Adam Chai: 262k
Datuk Seri Nurmala: 60k
Fong Yoo Kaw: 60k
Lau Kok Hiyong: 60k
Total director remuneration from gross profit: 7.33%

Operation Capicity
2017: 72.32%
2018: 77.84%

Use of fund
Capital expenditure & expansion: 74.4%
Sales, Marketing & Advertising: 9.48%
Product development: 4.11%
Estimated listing expenses: 12.01%

Conclusion
Good thing is:
1. Low debt company.
2. Revenue is growing, but EPS not growing.
3. Almost all IPO funds use to expand business.

The bad things:
1. Ace market with PE15 is consider a bit expensive.
2. Market demand (market size sold by cans) on CAGR is very low.
3. No claer dividend policy.
4. Director remuneration is expensive.

Conclusions
Is a average IPO. The market demand CAGR rate of the product showing the business not likely to grow too fast.

IPO Price: RM0.25
Good time: RM0.25 (PE15)
Bad time: RM0.13 (PE8)

Techbond Group Berhad

IPO Rating (3.5 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 13/11/2018
Close to apply: 23/11/2018
Listing date: 05/12/2018

Share Capital
Market Cap: RM151.8 mil
Shares Issue to sell: 60.105 mil shares
Enlarged Issued Shares: 230.00 mil shares

Business
Produce manufacturing product
1.Water-Based Adhesives: use in woodworking,paper & packaging, contruction, automotive application.
2.Hot Melt Adhesives: use in woodworking, matteress, paper & packaging.
3.Sealants: use in OEM industrial, Repellent & cleaner.

Revenue on Geo (2018)
Msia: 20.37%
Vietnam: 53.92%
Indonesia: 11.67%
China: 6.9%
Others: 7.14%

Adheisves export from Msia (include competitor)
2013: RM226 mil
2014: RM253 mil
2015: RM307 mil
2016: RM371 mil
2017: RM474 mil
CAGR 13-17: 20.3%

Adheisves import in Vietnam (include competitor)
2012: USD83 mil
2013: USD92 mil
2014: USD99 mil
2015: USD102 mil
2016: USD107 mil
CAGR 12-16: 6.2%

Fundamental
Market: Main Market
Price: RM0.66 (eps: RM0.06)
P/E & ROE: PE11, ROE11.23%
Cash & fixed deposit after IPO: RM0.16 per shares
NA after IPO: RM0.52
Total debt to current asset after IPO: 0.0858  (Debt: 11.217 mil, Non-Current Asset: 50.942 mil, Current asset: 79.721 mil)
Dividend policy: -

Financial
Trade Receivable: 63 days
Trade payable: 37 days

Past Financial Proformance (Revenue, EPS)
2018: RM86.811 mil (eps: 0.5835)
2017: RM82.363 mil (eps: 1.1341)
2016: RM75.861 mil (eps: 7.5463)
2015: RM63.626 mil (eps: 6.1198)

Public Listed Competitors (PAT Margin)
3M Company: 0.84%
Henkel: 6.65%
Sika AG: 12.02%
H.B. Fuller: 2.32%
Techbond Gorup: 15.46%

Net Profit Margin
2018: 15.46%
2017: 17.67%
2016: 15.41%
2015: 14.90%

After IPO Sharesholding
Lee Seng Thye: 73.65%
Dato' Hamzah: 0.04%
Tan Siew Geak: -%
Ooi Guan Hoe: 0.04%
Selma Enolil: 0.04%

Director Remuneration for FYE2019 (from gross profit 2018)
Lee Seng Thye: 5.58%
Dato' Hamzah: 0.35%
Tan Siew Geak: 1.7%
Ooi Guan Hoe: 0.31%
Selma Enolil: 0.31%
Total director remuneration from gross profit: 8.25%

Use of fund
Factory Construction (Vietnam): 25.2%
Purchase of machineries & equipment (Vietnam Factory): 32.12%
Working capital (Vietnam): 15.22%
Purchase of machineries & equipment (Shah Alam Factory): 11.35%
Working capital (M'sia Expansion): 3.51%
Listing expenses: 12.6%

Conclusion
Good thing is:
1. 87.4% IPO fund use to expand business.
2. Market demand of company products increasing each year Msia export CAGR 20.3% & Viet import CAGR 6.2%.
3. Net cash company (Cash more than debt)
4. PE11 still attractive & have one of the highest Net profit margin (15.46%) in public listed company.
5. Cashflow is healthy.

The bad things:
1. ROE only 11.23%.
2. Directors fees 8.25% is consider expensive.
3. Products is having many competitors supply.
4. No clear dividend policy.

Conclusions
Overall is good IPO. Worth for invest. We should able to see the growth of the business after March 2020 (completed the factory construction in Vietnam).

IPO Price: RM0.66
Good time: RM0.96 (PE16)
Bad time: RM0.54 (PE9)