Spring Art Holding Berhad

IPO Rating (1.75 out of 5.0 Stars)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 16/10/2019
Close to apply: 24/10/2019
Listing date: 08/11/2019

Share Capital
Market Cap: RM103.921 mil
Total Shares: 415.687 mil shares (IPO 20.784 mil, Company Insider/Miti/Private Placement 103.9216 mil)

Business
Design & Development, Manufacturing of furniture products.
India: 27.5%
Japan: 5.4%
UAE: 23.2%
Saudi Arabia: 33.1%
Canada: 2.1%
Bahrain: 7.4%
Others: 1.3%

Fundamental
Market: Ace Market
Price: RM0.25 (eps: RM0.015)
P/E & ROE: PE16.67, ROE10.58%
Cash & fixed deposit after IPO: RM0.000021 per shares
NA after IPO: RM0.14
Total debt to current asset after IPO: 0.8799 (Debt: 21.888 mil, Non-Current Asset: 55.864 mil, Current asset: 24.875 mil)
Dividend policy: No formal dividend policy.

Financial Ratio
Trade receivable: 32 days
Trade Payable: 33 days
Inventory turnover: 70 days

Operation Output Utilisation Rate
2019: 94.9%
2018: 92.5%
2017: 91.8%
2016: 93.4%
2015: 92.0%

Past Financial Proformance (Revenue, EPS)
2019 (4mths): RM18.297 mil (EPS: 0.006)
2018: RM50.382 mil (EPS: 0.015)
2017: RM48.276 mil (EPS: 0.019)
2016: RM41.287 mil (EPS: 0.018)
2015: RM36.425 mil (EPS: 0.017)

Net Profit Margin
2019: 14.1%
2018: 12.4%
2017: 16.3%
2016: 18.1%
2015: 19.8%

After IPO Sharesholding
Haji Ismail Bin Tunggak: 0.07%
Lim Kok Eng: 56%
Kwan Chian Poh: 14%
Law Sang Thiam: 0.07%
Tan Meng Loon: 0.07%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Haji Ismail Bin Tunggak: RM38K
Lim Kok Eng: RM510K
Kwan Chian Poh: RM440K
Law Sang Thiam: RM39K
Tan Meng Loon: RM38K
Total director remuneration from gross profit: RM1.065 mil or 7.4%

Key Management Remuration
Teo Miow Loo: RM200k-250k
Peter Teo Swee Chyang: RM50k-100k
Loo Soon Chuan: RM50k-100k
Lim Vivian: RM1-50k
Ahmad Mahdzir Bin Joffri: RM1-50k
key management remuneration from gross profit: RM0.300-0.550 mil or 2.09-3.82%

Use of fund
Machinery for Factory C : RM17.55 mil (71.9%)
General Working Capital: RM3.672 mil (15%)
Listing expenses: RM3.2 mil (13.1%)

Competitors (PE & ROE)
Sernkou: PE 17.54, ROE 13.03
SWSCAP: Loss making
SHH: Loss making
WEGMAS: PE 9.13, ROE 19.87
EUROSPAN: loss making
SENG YIP: ROE 11.93
TECHCENTIAL: ROE 16.24
SAMLING HOUSING: ROE 11.94
GREEN RIVER: ROE 1.45
AX FURNITURE: ROE 4.97
VALUE PLUS INDS: ROE 5.46

Industry Analysis (CAGR growth rate)
Furniture Production (Msia): 5.0%
Furniture export: 2.7%
Home & Office export: 5.5%
Furniture import: 9.9%

Conclusions
Good thing is:
1. Operation ulitisation rate is almost full.
2. Net profit margin is above 10%.
3. Almost all IPO fund use to expand business.
4. Completed of Factory C will increase production capability from 337,106 units to 674,000 units.
5. Stronger USD is benefit to the company.

The bad things:
1. Listing on Ace Market.
2. PE is around country PE (doesn't discount to country PE)
3. Debt compare to current asset is just enough to cover, turnover of company cashflow is important to the company.
4. Revenue not consider growing if add in inflation rate 6% & USDMYR rate.
5. Total Director & key management remuration is more than 10% of gross profit.
6. Furniture industry is growing at CAGR 5.0%
7. Still have some competitors is better then Spring Art.

Conclusions
Is not a discount IPO. Price is just average to market. With the increase of capability units (almost double of production), revenue should able to increase better. The Factory C will be able to start operating in July 2020. Price movement should not increase much around 6 month before the July 2020.

IPO Price: RM0.25
Good time: RM0.38 (PE16, with 60% production capability increase of revenue, should not before July 2020)
Bad time: RM0.175 (PE9, with 30% production capability increase of revenue, should not before July 2020)

Solarvest Holdings Berhad

IPO Rating ( 2.25 out of 5.0 Stars)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 30/09/2019
Close to apply: 11/11/2019
Listing date: 26/11/2019

Share Capital
Market Cap: RM136.718 mil
Total Shares: 390.623 mil shares (IPO 19.531 mil, Company Insider/Miti/Private Placement 79.297 mil)

Business
Design & Sale of solar energy sevices (EPCC services), Operations & Maintenance of solar energy services , and Operate Solar Plant.
EPCC Services: 94.7%
Operations & Maintenance: 0.16%
Solar PV plant: 5.12%

Fundamental
Market: Ace Market
Price: RM0.35 (eps: RM0.028)
P/E & ROE: PE12.5, ROE17.43%
Cash & fixed deposit after IPO: RM0.1145 per shares
NA after IPO: RM0.16
Total debt to current asset after IPO: 0.56 (Debt: 51.111 mil, Non-Current Asset: 23.644 mil, Current asset: 91.273 mil)
Dividend policy: No formal dividend policy.

Financial Ratio
Trade receivable: 71 days
Trade Payable: 54 days
Inventory turnover: 7 days

Past Financial Proformance (Revenue, EPS)
2019: RM112.201 mil (EPS: 0.028)
2018: RM45.069 mil (EPS: 0.021)
2017: RM39.009 mil (EPS: 0.017)
2016: RM35.286 mil (EPS: 0.011)

Net Profit Margin
2019: 9.9%
2018: 18.3%
2017: 16.7%
2016: 11.8%

After IPO Sharesholding
Lim Chin Siu: 41.1% (indirect)
Tan Chyi Boon: 41.1% (indirect)
Chiau Haw Choon 33.6% (indirect)

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Dato' Che Halin: RM66k
Lim Chin Siu: RM490k
Tan Chyi Boon: RM463k
Chiau Haw Choon: RM42k
Chang Kong Foo: RM42k
Fong Shin Ni: RM42k
Total director & key management remuneration from gross profit: RM1.145mil or 5.1%

Use of fund
Business expansion: 8.7%
Capital expenditure: 11.5%
Working capital: 55.5%
Repayment Debt: 14.5%
Listing expenses: 9.8%

Competitors (PE & ROE)
Solarvest: PE12.5 ROE17.43% GP9.9%
Cypark: PE8.76, ROE10.49%
Tekseng: Loss making
Gading Kencana: loss making
Helios PV: GP23.9%
Mattan: GP1.3%
Plus Solar: GP12.4%

Industry Analysis (Forecast)
Green energy is very clearly futures trend of energy. Solar is in sunrise industry with a lot competitors.

Conclusions
Good thing is:
1. Co-founder Owners is young.
2. PE12.5 still acceptable, but a bit high in same industry & ROE17.43% is healthy.
3. Debt ratio is healthy.
4. Revenue growing for past 4 years.
5. In sunrise industry.

The bad things:
1. Net profit margin slowing down.
2. No clear dividend policy.
3. Director remuration is over 3% of gross revenue.
4. Use 14.5% IPO fund to pay debt.
5. Many competitors not making good profit in same industry.
6. Listing on Ace market.
7. Revenue highly depend on EPCC segment.

Conclusions
Green energy is a must in futures. However they are facing large competitors environment in same industry.
Will consider is an average IPO.

IPO Price: RM0.35
Good time: RM0.38 (PE13.5)
Bad time: RM0.17 (PE6)

Ame Elite Consortium Berhad

IPO Rating (2.0 out of 5.0 Stars)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 24/09/2019
Close to apply: 30/09/2019
Listing date: 14/10/2019

Share Capital
Market Cap: RM623 mil
Total Shares: 427.115 mil shares (IPO 17.084 mil, Company Insider/Miti/Private Placement 111.050 mil)

Business
Construction on industrial, property development, engineering, property investment.
Contract income: 80.93%
Property income: 12.72%
Rental income: 6.35%

Fundamental
Market: Mian Market
Price: RM1.30 (eps: RM0.11) will refund if Ins IPO price lower than RM1.30.
P/E & ROE: PE11.73, ROE8.38%
Cash & fixed deposit after IPO: RM0.408 per shares
NA after IPO: RM1.32
Total debt to current asset after IPO: 0.778 (Debt: 507.483 mil, Non-Current Asset: 448.306 mil, Current asset: 652.127 mil)
Dividend policy: Propose 20 PAT dividend policy.

Financial Ratio
Trade receivable: 44 days
Trade Payable: 66 days
Inventory turnover: 39 months

Past Financial Proformance (Revenue, EPS)
2019: RM339.013 mil (eps: 0.1109)
2018: RM341.320 mil (eps: 0.1662)
2017: RM298.958 mil (eps: 0.1350)
2016: RM249.243 mil (eps: 0.0763)

Net Profit Margin
2019: 15.04%
2018: 22.92%
2017: 19.10%
2016: 13.08%

After IPO Sharesholding
Tengku Azrina: 0.1%
Lee Chai: 21%
Lim Yook Kim: 21%
Kang Ah Chee: 21%
Lee Sai Boon: 7%
Lim Pei Shi: 0.1%
Chang Tian Kwang: 0.1%
Tan Lay Beng: 0.1%
Wee Soon Chit: 0.1%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Tengku Azrina: 61.8k
Lee Chai: 3.095 mil
Lim Yook Kim: 0.980 mil
Kang Ah Chee: 0.980 mil
Lee Sai Boon: 2.473 mil
Lim Pei Shi: 0.451 mil
Chang Tian Kwang: 41.2k
Tan Lay Beng: 48.1k
Wee Soon Chit: 41.2k
Total director & key management remuneration from gross profit: 9.346mil or 9.94%

Use of fund
Industrial property development & investment project: 62.2%
Working capital: 20.7%
Precast Concrete Fabrication Capacity: 8.1%
Lisitng Expenses: 9.00%

Competitors (PE)
*doesn't have very similar competitor because their business is focus on contruct industry property.
SPsetia PE16.36
Mahsing: PE7.88
Ecowrld: PE9.89
UEMS: PE28.23
Bpuri: loss making

Industry Analysis (Forecast)
2013-2018: per year
Industrial Construction: 3.3%
Precast Concrete: 11.13%
Steel Engineering: 4.8%
M&E: 20.21%
Indutry property: 4.01%

Conclusions
Good thing is:
1. PE on average level in the same industry.
2. Almost all IPO fund to use in business development.
3. Gov is focus on industry 4.0 & trade war will encourage the migrate of business to Asia countries.
4. Net profit margin is 15.04%

The bad things:
1. ROE too low.
2. Their business industry still in slow growing stage.
3. Director remuration is around 9.94% from gross revenue.
4. Revenue doesn't growth for past 2 years.

Conclusions
The business is focus on contruct industry property. The industry 4.0 might help, but believe still on the not the easy journey. Fully using the fund for business expansion is very encourage. Is only can consider a 60:40 winning ratio on this investment (40% rate of winning ratio).

IPO Price: RM1.30
Good time: RM1.21 (PE11)
Bad time: RM0.88 (PE8)

SDS Group Berhad

IPO Rating ( 2.0 star out of 5.0)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 23/08/2019
Close to apply: 23/09/2019
Listing date: 07/10/2019

Share Capital
Market Cap: RM93.339 mil
Total Shares: 405.823 mil shares (IPO 20.291 mil, Company Insider/Miti/Private Placement 84.005 mil)

Business
Manufacturer of bakery product like breads, buns, rolls, and cakes.
Product brand: Top Baker, Dailys, SDS

Fundamental
Market: Ace Market
Price: RM0.23 (eps: RM0.019)
P/E & ROE: PE12.1, ROE13.19%
Cash & fixed deposit after IPO: RM0.0344 per shares
NA after IPO: RM0.15
Total debt to current asset after IPO: 2.22 (Debt: 78.572 mil, Non-Current Asset: 102.818 mil, Current asset: 35.278 mil)
Dividend policy: No formal dividend policy.

Financial Ratio
Trade receivable: 60 days
Trade Payable: 71 days
Inventory turnover: 14 days

Past Financial Proformance (Revenue, EPS)
2019: RM187.129 mil (eps: 0.019)
2018: RM174.201 mil (eps: 0.014)
2017: RM139.333 mil (eps: 0.015)
2016: RM98.982 mil (eps: 0.009)

Net Profit Margin
2019: 4.2%
2018: 3.4%
2017: 4.5%
2016: 4.1%

After IPO Sharesholding
Tan Kim Seng: 24.4%
Tan Kim Chai: 24.4%
Teou Chau Hoyk: 4.6%
Tan Yon Haw: 5.3%
Tan Yong Thye: 5.3%
Tan Yong Ping: 4.6%
Tan Yong Herng: 4.6%
Tan Kee Jin: 0.3%
SDS Tan Properties: 1.1%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Tan Kim Seng: RM288k
Tan Kim Chai: RM252k
Tan Yon Haw: RM252k
Tan Kee Jin: RM252k
Lim Pang Kiam: RM55k
Phang Sze Fui: RM43k
Azahar bin Baharudin: RM43k
Dato' Albert Ding: RM43k
Total director & key management remuneration from gross profit: 2.15%

Use of fund
Capital Expenditure: 25%
Repayment Debt: 29.2%
Working Capital: 32.5%
Lisitng Expenses: 13.3%

Competitors (Gross Profit margin)
SDSG: 31.9%
Fuji: 29.2%
Italian Baker: 34%
Roti Sedap: 4%
Adventist: 19.9%
Gardenia: 29.8%

Industry Analysis (Forecast)
2018-2023: 5.5%-6.3% per year

Conclusions
Good thing is:
1. PE12 & ROE13.19%
2. Revenue is continue to growing past 4 years, however we notice the growth rate is slow down.
3. Director fees is still acceptable at 2.15% from gross profit.
4. Is a food industry.

The bad things:
1. Listing in Ace market.
2. Debt is high compare to the current assets. Not a healthy signal.
3. PAT margin is too low.
4. No formal dividend policy.
5. Revenue is not grow for past 4years.
6. Use 29.2% of IPO fund to pay debt.
7. Industry test market size grow 5%-6% per year is almost no grow after factor in inflation.

Conclusions
The pricing is fair. However the futures or potential of growing is unable to forecast.
The food industry is booming around the world, buble tea, fast food, restaurant (e.g. MCD shares price grow 25% since early 2019).
There is too many competitor in the same industry. Not a good bet for investment.

IPO Price: RM0.23
Good time: RM0.30 (PE16)
Bad time: RM0.17 (PE8)

MTAG Group Berhad

IPO Rating (1.5 star  out of 5.0)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 19/08/2019
Close to apply: 06/09/2019
Listing date: 25/09/2019

Share Capital
Market Cap: RM 361.257 mil
Total Shares: 681.617 mil shares (IPO 136.323 mil, Private Placement 20.074 mil)

Business
Manufacture of Air Filter product, Printing labels & stickers, tapes adhesives, and other product.

Fundamental
Market: Ace Market
Price: RM0.53 (Diluted eps: RM0.035) Amended 0.0467)
P/E & ROE: PE15.14 Amended 11.34 (Propspectus use PE11 on EPS0.048), ROE29.9%
Cash & fixed deposit after IPO: RM0.056 per shares
NA after IPO: RM0.23
Total debt to current asset after IPO: 0.248 (Debt: 29.477 mil, Non-Current Asset: 69.619 mil, Current asset: 118.838 mil)
Dividend policy: Suggest 20% dividend policy.

Financial Ratio
Trade receivable: 96 days
Trade Payable: 53 days
Inventory turnover: 63 days

Past Financial Proformance (Revenue, EPS)
2019: RM136.109 mil (9mth)
2018: RM187.465 mil (eps: 0.070)
2017: RM186.607 mil (eps: 0.033)
2016: RM126.983 mil (eps: 0.023)

Net Profit Margin
2019: 17.42% (9mths)
2018: 25.34%
2017: 12.13%
2016: 12.51%

After IPO Sharesholding
Chaw Kam Shiang: 50.5%
Goh Jui Heng: 0.8%
Lau Cher Liang: 16.7%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Lee Ting Kiat: RM31.5k
Chaw Kam Shiang: RM2.7735 mil
Goh Jui Heng: RM0.3764 mil
Lau Cher Liang: RM3.578 mil
Jason Tan Kim Song: RM25.5K
Dyana Sofya: RM25.5k
Total director & key management remuneration from gross profit: RM6.8104 mil (12.07%)

Use of fund
Land acquisition & construction manufacture: 45.7%
Capital expenditure: 18%
Repayment debt: 13.8%
Working capital: 17.2%
Listing expenses: 5.3%

Industry Analysis (Insufficient historical data)
Label Printing & converting industry 2017-2018 growth rate 9%
SDSSF industry 2017-2018: Growth rate 4.5% (factor in inflation, there is almost no growth).

Conclusions
Good thing is:
1. PE15 still not above country PE.
2. Have clear dividend policy.
3. ROE29.9%
4. Average profit margin near to 15%

The bad things:
1. Listed in Ace market.
2. Revenue did not growth past 2 year.
3. Director fees 12% from gross profit is too expensive.
4. Repayment debt 13.8%
5. Unable provide industry research of converting mesh into air filter product. The air filter product contribute more than 50% of company revenue.
6. Too little industry research to do forcase for the other 2 business (label printing & SDSSF).
7. Steel business is no growth if factor in inflation.

Conclusions
Overall is unable to justify the IPO true value. Lack of certain information to do forcase.

IPO Price: RM0.53
Good time: RM0.0.45 (PE13)
Bad time: RM0.28 (PE8)

Tashin Holding Berhad

IPO Rating ( 1.75 star  out of 5.0)

Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 20/06/2019
Close to apply: 19/07/2019
Listing date: 01/08/2019

Share Capital
Market Cap: RM mil
Total Shares: 348.991 mil shares (IPO 59.329 mil, Company Insider/Miti/Private Placement 55.489 mil)

Business
Produce slit coils & steel sheets.
Manufacturing & trade of steel product.

Fundamental
Market: Ace Market
Price: RM0.58 (eps: RM0.0323)
P/E & ROE: PE17.96, ROE5.98%
Cash & fixed deposit after IPO: RM0.063 per shares
NA after IPO: RM0.54
Total debt to current asset after IPO: 0.34 (Debt: 46.769 mil, Non-Current Asset: 98.649 mil, Current asset: 136.872 mil)
Dividend policy: No formal dividend policy.

Financial Ratio
Trade receivable: 72 days
Trade Payable: 45 days
Inventory turnover: 130 days

Past Financial Proformance (Revenue, EPS)
2018: RM260.545 mil (eps: 0.0389)
2017: RM257.701 mil (eps: 0.0543)
2016: RM214.741 mil (eps: 0.0421)
2015: RM212.284 mil (eps: 0.0144)

Net Profit Margin
2018: 4.33%
2017: 6.10%
2016: 5.67%
2015: 1.96%

After IPO Sharesholding
Prestar: 34%
Formula Naga: 33.1%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Dato' Kalsom: RM43k
Lim Choon Teik: RM560k
Foong Kok Chuin: RM510k
Sim Puei Chun: RM33k
Khaw Chooi Kee: RM36k
Rusdy Bin Ishak: RM33k
Ir. Tan Tiong Ben: RM33k
Dato' TToh Yew Peng: RM33k
Toh Yew Seng: RM33k
Koay Kah Ee: RM33k
Total director & key management remuneration from gross profit: 5.35%

Use of fund
Land Acquisition: 20.92%
Construction of new factory: 30.08%
Manufacturing of wire mesh: 11.92%
Slitting line: 5.23%
5 Packing machines: 5.23%
Working capital: 17.32%
Listing Expenses: 9.3%

Competitors (Profit after tax margin)
Total 17 competitors with PAT margin -12.47% to 8.04%

Industry Analysis (CAGR 2015-2018, base year 2018)
Steel Comsumption: CAGR 2.16%
Steel processing in M'sia: CARG 0.55%
Steel wire & pipes: CAGR 13.3%

Conclusions
Good thing is:
1. Debt still consider at healthy level.
2. Almost all IPO use to expend business.

The bad things:
1. Listing under Ace Market.
2. PE17.96 is expensive than current Msia country PE16.5
3. ROE5.98% is consider not attractive.
4. Revenue growth average 6% per year, but add in the inflation, the revenue might consider at no growth.
5. Net profit margin is very low.
6. Director fees is over 3% from gross profit.
7. Compare to total 17 competitor, we found that no competitor in same industry able to make profit after tax over 10%.
8. The analysis in the steel industry have very little growth in since 2015.
9. No formal dividend policy.

Conclusions
Overall is a very little profit margin business. The industry itself might be the major problem. Total 17 competitors, non of it able to make profit margin over 10%.

IPO Price: RM0.58
Good time: RM0.42 (PE13)
Bad time: RM0.25 (PE8)

I-Stone Group Berhad

IPO Rating (2.0 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 21/06/2019
Close to apply: 08/07/2019
Listing date: 17/07/2019

Share Capital
Market Cap: RM195 mil
Total Shares: 1.221 bil shares (IPO 61.074 mil, Company Insider/Miti/Private Placement 305.37 mil)

Business
Manufacturing automation business machinery & distribution of hardware & software.

Geo
Msia: 78.2%
S'pore: 12.5%
Philippines: 6.8%
Others: 2.5%

Fundamental
Market: Ace Market
Price: RM0.16 (eps: RM0.0092, Prospecture is using 0.0115 which is before add in additional enlargement shares is not acceptable)
P/E & ROE: PE17.39, ROE19.5%
Cash & fixed deposit after IPO: RM0.0072 per shares
NA after IPO: RM0.05
Total debt to current asset after IPO: 0.44 (Debt: 13.716 mil, Non-Current Asset: 40.434 mil, Current asset: 30.896 mil)
Dividend policy: No formal dividend policy.

Financial Ratio
Trade receivable: 76 days
Trade Payable: 53 days
Inventory turnover: 48 days

Past Financial Proformance (Revenue, EPS)
2018: RM67.591 mil (eps: 0.0092)
2017: RM60.381 mil (eps: 0.0067)
2016: RM43.127 mil (eps: 0.0039)
2015: RM44.124 mil (eps: 0.0033)

Net Profit Margin
2018: 17.0%
2017: 14.2%
2016: 10.9%
2015: 9.3%

After IPO Sharesholding
OUE (Tee Sook Sing): 27%
Chan Kok San: 20.3%
Chin Chung Lek: 7.4%
Chan Sai Kong: 4.8%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Dato' Azman Bin Mahmood: RM64k
Tee Sook Sing: RM424k
Chan Kok San: RM385k
Chin Chung Lek: RM181k
Professor Dr. Ruzairi bin Abdul Rahim: RM51k
Chia Gek Liang: RM64k
Law Lee Yan: RM51k
Total director & key management remuneration from gross profit:5.49%

Use of fund
Process & Product Development: 10.7%
Pay Debt: 34.5%
New D&D centre: 17.4%
Capital expenditure: 13.3%
Working capital: 15.1%
Lising expenses: 9%

Competitor (PE & ROE)
AT: Loss making.
Genetec: PE9.12 ROE7.41
Greatec: PE12.47
MMSV: PE19.26 ROE11.23
PIE: PE13.5 ROE8.54
Penta: PE19.71 ROE18.46
Vitrox: PE30.23 ROE24.88

Industry Analysis (CAGR 2015-2018, base year 2018)
CAGR: 34.99%

Conclusions
Good thing is:
1. ROE19.5 is healthy.
2. Revenue is growing over 4 years.
3. Net profit margin is over 15%
4. The industry of their business is growing with CAGR 34.99% since 2015.
5. Competitor able to trade with higher PE.

The bad things:
1. No fixed Dividend policy
2. Listing in Ace market.
3. Director fees is over 3% from gross profit.
4. Use 34.5% IPO fund to pay debt.
5. Expensive then country PE16.5, the company is PE17.39 (in prospecture book is PE13.91, using ESP 0.0115 which is before add in additional enlargement shares is not acceptable).

Conclusions
Overall is a average IPO. Able to see the growth & need of the automation to replace human labor in business processing.
However investor need to aware that total add in enleargement shares is 1221.48 mil shares, but PE arriving by prospectus book is using 997.18mil shares.

IPO Price: RM0.16
Good time: RM0.175 (PE19)
Bad time: RM0.095 (PE13)

Kim Hin Joo Berhad

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

Date
Open to apply: 19/06/2019
Close to apply: 26/06/2019
Listing date: 08/07/2019

Share Capital
Market Cap: RM163.4 mil
Shares Issue: 133 mil shares (IPO 76 mil, Company Insider/Miti/Private Placement 57 mil)

Business
Retail & Distribution of baby, children, & maternity products.

Geo
Malaysia: 98.25%
Overseas: 1.75%

Fundamental
Market: Ace Market
Price: RM0.43 (eps: RM0.0292)
P/E & ROE: PE14.73, ROE16.43%
Cash & fixed deposit after IPO: RM0.0328 per shares
NA after IPO: RM0.18
Total debt to current asset after IPO: 0.29 (Debt: 14.38 mil, Non-Current Asset: 4.243 mil, Current asset: 48.884 mil)
Dividend policy: 40% on PAT dividend.

Financial Ratio
Trade receivable: 6.32 days
Trade Payable: 61.57 days
Inventory turnover: 240.14 days

Past Financial Proformance (Revenue, EPS)
2018: RM97.687 mil (eps: 0.0366)
2017: RM93.310 mil (eps: 0.0381)
2016: RM84.857 mil (eps: 0.0402)
2015: RM77.031 mil (eps: 0.0270)

Net Profit Margin
2018: 11.38%
2017: 12.39%
2016: 14.42%
2015: 10.65%

After IPO Sharesholding
KHI (Pang Kim Hin): 62%

Director & Key Managemen Remuneration for FYE2019 (from gross profit 2018)
Pang Kim Hin: RM60k
Pang Shu Ming: RM362k
Goh Poh Teng: RM379k
Chew Soo Lin: RM32k
Yen Se-Hua Stewart: RM30k
Kor Yann Ning: RM28k
Key Management: RM0.956mil - RM1.250mil
Total director & key management remuneration from gross profit: 4.18%

Use of fund
Business Expansion & Capital Expenditure: 61.20%
Working Capital: 27.17%
Listing Expenses: 11.63%

Competitor (PAT Profit Margin)
Asia Brands Berhad: -17.11%
Fiffy Sdn Bhd: 5.44%
Happikiddo: 3.83%
Manjaku Baby Centre 2.58%
Poney Gaments:0.29%
QQ Baby: 0.48%
Serimep: 7.48%
Twins Baby: -1.82
Toy'R'Us: 12.17%
KHJ Group: 11.38%

Industry Analysis (CAGR 2015-2018, base year 2018)
Imports of Baby product: CAGR 13.19%

Conclusions
Good thing is:
1. PE14.73 & ROE16.43% still acceptable.
2. Director fees + kay management remuration is acceptable.
3. Almost all IPO fund use to expend busines.
4. Baby product is some kind of needs products.
5. Import of baby product is increase with CAGR 13.19% per year, which the industry is increase in the demand.

The bad things:
1. Listing in Ace market.
2. Turnover inventory 240.14days.
3. Revenue is increasing over the pas 4 years, but is in a slow mode, after add in inflation, the company might not have increase in revenue.
4. Profit margin is not encourage.
5. Average competitor margin is not encourage. 

Conclusions
Overall might not a good investment as compare to others competitor, the business might not in the good profit business.

IPO Price: RM0.43
Good time: RM0.47 (PE16)
Bad time: RM0.26 (PE9)

UWC Berhad

IPO Rating ( 2.75 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 17/06/2019
Close to apply: 28/06/2019
Listing date: 10/07/2019

Share Capital
Market Cap: RM300 mil
Shares Issue: 103 mil shares (IPO 70 mil, Company Insider & placement 336 mil)

Business
Provision of percision sheet metal fabrication, value added assembly services, & percision machined components.

Geo
Msia: 50.9%
S'pore: 40.5%
USA:2.5%
China:2.8%
France: 2.0%
Others: 1.3%

Fundamental
Market: Main Market
Price: RM0.82 (eps: RM0.063)
P/E & ROE: PE13, ROE20.2%
Cash & fixed deposit after IPO: RM0.142 per shares
NA after IPO: RM0.229
Total debt to current asset after IPO: 1.58 (Debt: 64.482 mil, Non-Current Asset: 23.86 mil, Current asset: 40.622 mil)
Dividend policy: 20% on PAT dividend.

Financial Ratio
Trade receivable: 88 days
Trade Payable: 60 days

Past Financial Proformance (Revenue, EPS)
2018: RM136.495 mil (eps: 0.063)
2017: RM92.158 mil (eps: 0.0032)
2016: RM76.311 mil (eps: 0.023)

Net Profit Margin
2018: 22.9%
2017: 16.1%
2016: 25.4%

After IPO Sharesholding
UMC Capital (Ng Chai Eng & Lau Chee Kheong) : 52.6%

Director Remuneration for FYE2019 (from gross profit 2018)
Dato' Ng Chai Eng: RM971k
Lau Chee Kheong: RM971k
Dato' Wan Hashim Bon Wan Jusoh: RM58k
F'ng Meow Cheng: RM29k
Lio Chee Yeong: RM29k
Total director remuneration from gross profit: 4.8%

Use of fund
Purchase of new machines & equipment: 56%
Repayment debt: 31.3%
Working capital: 5%
Listing expenses: 7.7%

Competitor (PAT Profit Margin)
Frencken: 8.1%
Kobay Technology: 6.2%
Alpha: 10.1%
UMC: 17%

Industry Analysis (CAGR 2015-2018, base year 2018)
CAGR of industry 6.9%

Machinery Utilisation
Oversall Utilisation: 85%

Conclusion
Good thing is:
1. PE13 & ROE20 is healthy.
2. Half revenue is from foreign site, at least not too depend on local revenue.
3. Revenue & EPS increase over 3 years.
4. Net profit margin have around 20%.
5. The needs of the industry product still continue growing CARG 6.9%

The bad things:
1. Debt is too high compare to their current asset.
2. Director fees over 3% of gross revenue.
3. IPO funds 31.3% use for pay debt.

Conclusions
Overall the business is growing. Pricing at fair level.

IPO Price: RM0.82
Good time: RM1.00 (PE16)
Bad time: RM0.57 (PE9)

Mestron Holdings Berhad

IPO Rating ( 2.00 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 23/05/2019
Close to apply: 03/06/2019
Listing date: 18/06/2019

Share Capital
Market Cap: RM126.4 mil
Shares Issue to sell: 237 mil shares (IPO 39.5 mil, Company Insider & placement 197.5 mil)

Business
Manufacturer of steel poles (street light, traffic light, Camera Pole, & others)

Geo
Msia: 92.7%
Australia: 1.8%
Singapore: 1%
Korea: 3.6%
Others: 0.9%

Fundamental
Market: Ace Market
Price: RM0.16 (eps: RM0.0118)
P/E & ROE: PE13.6, ROE15%
Cash & fixed deposit after IPO: RM0.0115 per shares
NA after IPO: RM0.07
Total debt to current asset after IPO: 0.61 (Debt: 27.235 mil, Non-Current Asset: 37.490 mil, Current asset: 43.938 mil)
Dividend policy: No fixed dividend policy.

Financial Ratio
Trade receivable: 108 days (Ave over 4yrs)
Trade Payable: 89 days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM63.680 mil (eps: 0.0118)
2017: RM60.747 mil (eps: 0.0108)
2016: RM44.374 mil (eps: 0.0067)
2015: RM40.540 mil (eps: 0.0028)

Net Profit Margin
2018: 14.6%
2017: 14.1%
2016: 11.9%
2015: 5.4%

After IPO Sharesholding
Por Teong Eng: 35%
Loon Chin Seng: 35%

Director Remuneration for FYE2019 (from gross profit 2018)
Tajul Arifin Bin Mohd Tahir: RM60k
Por Teong Eng: RM600k
Loon Chin Seng: RM600k
Leong Peng Phooi: RM36k
Phang Sze Fui: RM78k
Total director remuneration from gross profit: 6.5%

Use of fund
Expansion of Manufacturing Facility, Machines & Equipment: 51.4%
Working Capital: 20.5%
Repayment Debt: 15.8%
Listing Expenses: 12.3%

Competitor (Gross Profit Margin)
Decor Pole S/B: 7.3%
Lysaght Industries S/B: 29.8%
Oversea Deco Industries S/B:18%
Perfect Pole S/B: 41.1%
Mestron Group:28.9%

Industry Analysis (CAGR 2015-2018, base year 2018)
CAGR: 13.5%

Conclusion
Good thing is:
1. PE13.6 & ROE15% is healthy.
2. Debt ratio still healthy.
3. Revenue is increasing since 2015.

The bad things:
1. Business too focus in Malaysia.
2. Listing in Ace market.
3. No fixed dividend policy.
4. Director fees is more than 3% of gross profit.
5. Use 15.8% IPO fund to pay debt.
6. Competitor have better profit margin.
7. Change of new government might effect the new gross profit margin in coming years.

Conclusions
Overall is a normal IPO. Is better to wait another few quarters result to check on the earning to judge the investment opportunities.

IPO Price: RM0.16
Good time: RM0.185 (PE16)
Bad time: RM0.100 (PE9)

HPMT Holdings Berhad

IPO Rating ( 3.25 stars out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 17/05/2019
Close to apply: 29/05/2019
Listing date: 12/06/2019

Share Capital
Market Cap: RM183.953 mil
Shares Issue to sell:  116.615 mil shares (IPO 16.426 mil, Company Insider & placement 100.189 mil)

Business
Manufacturing cutting tools (Drilling, milling, engireering needs cutting tools), trading on others brand cutting tools, & Coating.

Geo
Local: 19.9%
Europe: 50.7%
Asia: 28.9%
Others: 0.5%

Fundamental
Market: Main Market
Price: RM0.56 (eps: RM0.0372)
P/E & ROE: PE15, ROE12.17%
Cash & fixed deposit after IPO: RM0.054 per shares
NA after IPO: RM0.34
Total debt to current asset after IPO: 0.968 (Debt: 59.947 mil, Non-Current Asset: 111.018 mil, Current asset: 61.925 mil)
Dividend policy: Board suggestion at 30% dividend policy.

Financial Ratio
Trade receivable: 77 days (Ave over 4yrs)
Trade Payable: 22 days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM85.296 mil (eps: 0.0483)
2017: RM85.152 mil (eps: 0.0587)
2016: RM75.162 mil (eps: 0.0497)
2015: RM68.876 mil (eps: 0.0420)

Net Profit Margin
2018: 16.1%
2017: 17.5%
2016: 17.5%
2015: 16.5%

After IPO Sharesholding
Ku He @ Khoo Yee Her: 62.6%
Khoo Seng Giap: 0.1%
Tan Kim Chuan: 0.1%
Dato'Khoo Ah Chye: 0.1%

Director Remuneration for FYE2019 (from gross profit 2018)
Ku He @ Khoo Yee Her: RM1.008 mil
Khoo Seng Giap: RM0.5001 mil
Tan Kim Chuan: RM0.3939 mil
Dato'Khoo Ah Chye: RM38.5k
Peter Ho Kok Wai: RM46.5k
Chua Put Moy: RM41.5k
Lee Ee Sian: RM44.5k
Oei Kok Eong: RM41.5k
Total director remuneration from gross profit: 5.6%

Use of fund
Purchase of new machineries & equipment: 80.3%
Working Capital: 6.9%
Listing Expenses: 12.8%

Competitor PE & ROE
Halcyon Technology (Thailand): PE5.34, ROE16.83
NS Tool (Japan): PE13.65, ROE15.48
Msia competitors (non-listed) Revenue: RM5mil-RM11.9mil

Industry Analysis (CAGR 2019-2023, base year 2018)
Cutting tools Market size: CAGR 3.8%

Conclusion
Good thing is:
1. PE15 is acceptable.
2. Market network is diversified.
3. Have clear dividend policy.
4. Revenue is increasing over past 4 years.
5. Net prfoti margin above 15%.
6. Almost all IPO funds use to expand business (except listing expenses).
7. The company plan to increase monthly production 43.5% by end of FYE 2021.

The bad things:
1. Director remuneration over 3% gross profit.
2. ROE12.17% less than 15%.
3. The industry CAGR only 3.8%
4. Competitor have better PE & ROE.

Conclusions
Overall is a good IPO. The IPO consider fair & we saw the intention of growing the business. However, the industry involved, having a slow growing phase.
After world war II, development develop rapidly, & most building is aging. Might or might not, there is possiblilities that the industry will need some growth in futures.

IPO Price: RM0.56
Good time: RM0.665 (PE18)
Bad time: RM0.0375 (PE10)

Greatech Technology Berhad

IPO Rating ( 2.50 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 13/05/2019
Close to apply: 24/05/2019
Listing date: 13/06/2019

Share Capital
Market Cap: RM381 mil
Shares Issue to sell: 119.750 mil shares (IPO 18.780 mil, Company Insider & placement 100.97 mil)

Business
Manufacture of Automated equipment & provision of parts and services for Solar, semiconductor, & consumer electronic sectors.

Geo
Local: 10.01%
Foreign: 89.99% (Vietnam 62.68% & USA 25.37%)

Fundamental
Market: Ace Market
Price: RM0.61 (eps: RM0.0627)
P/E & ROE: PE9.73, Ave ROE over 4yrs 11.74%
Cash & fixed deposit after IPO: RM0.11 per shares
NA after IPO: RM0.22
Total debt to current asset after IPO: 0.43 (Debt: 77.358 mil, Non-Current Asset: 39.243 mil, Current asset: 178.639 mil)
Dividend policy: Does not fixed any dividend policy.

Financial Ratio
Trade receivable: 65days (Ave over 4yrs)
Trade Payable: 62days (Ave over 4 yrs)

Past Financial Proformance (Revenue, EPS)
2018: RM219.582 mil (eps: 0.0627)
2017: RM93.914 mil (eps: 0.0376)
2016: RM22.703 mil (eps: 0.0115)
2015: RM21.393 mil (eps: 0.0111)

Net Profit Margin
2018: 14.45%
2017: 20.29%
2016: 25.59%
2015: 26.17%

After IPO Sharesholding
Tan Eng Kee: 74%

Director Remuneration for FYE2019 (from gross profit 2018)
Ooi Hooi Kiang: 66k
Tan Eng Kee: 698k
Khor Lean Heng: 510k
Mariamah Binti Daud: 66k
Ooi Ching Hock: 66k
Total director remuneration from gross profit: 3.1%

Use of fund
Business Expansion: 24.64%
Capital Expenditure: 6.85%
R&D expenditure: 6.85%
Working Capital: 50.03%
Repayment Debt: 6.16%
Lisitng Expenses: 5.47%

Competitor PE & ROE
Penta: PE22.28, ROE16
Vitrox: PE30.45, ROE24.88
Sam: PE14.18, ROE14.61
Mi: PE21.11, ROE13.42
Genetec: PE7.09, ROE11.38
Elsolf: PE14.29, ROE35.53

Industry Analysis (Asean 2012-2018)
Global Solar Cell & Solar Module Production CAGR:27.4% & 27.4%
Global Sales Semiconductor CAGR: 8.7%
Consumer Electronic CAGR: 6.1%

Conclusion
Good thing is:
1. PE9.73 still below PE10
2. Revenue is growing past 4 year.
3. Director fees around 3%
4. They are in the sunrise industry.
5. Business having 89.99% is export. The strong USD will benefit the company.

The bad things:
1. Average ROE11.74% (Below ROE15% level), their competitor ROE is higher.
2. IPO fund 6.16% use to pay debt.
3. IPO in the ACE market.
4. Effected by current trade war (might be opportunities & also might not).

Conclusions
Overall is a above average IPO. The most of the funds is use for expand the business.
Demand of their product is increasing every years.

IPO Price: RM0.61
Good time: RM0.94 (PE13)
Bad time: RM0.43 (PE7)

Leong Hup International Berhad

IPO Rating (3.0 star  out of 5.0)
Copyright@http://lchipo.blogspot.com/

Date
Open to apply: 25/04/2019
Close to apply: 03/05/2019
Listing date: 16/05/2019

Share Capital
Market Cap: RM 4.015 bil (published prospecture book wrote 1.5bil is typo)
Shares Issue to sell: 937.5 mil shares (IPO 98 mil, private placement 839.5 mil)
Enlarged Issued Shares: 25.68%

Business
Feedmill 39.3%, Livestock & other poultry related product 61.0%

Geo
Msia: 28.8%
Indonesia: 31.7%
Singapore: 19.8%
Vietnam: 19.20%
Philippines: 0.5%

Fundamental
Market: Main Market
Price: RM1.10 (eps: RM0.0566)
P/E & ROE: PE20.8, ROE12.5%
Cash & fixed deposit after IPO: RM0.15 per shares
NA after IPO: RM0.42
Total debt to current asset after IPO: 1.30 (Debt: 2.985 bil, Non-Current Asset: 2.659 bil, Current asset: 2.304 bil)
Dividend policy: Target payout ratio 30% on Net profit.

Financial Ratio
Trade receivable: 37.2days
Trade Payable: 23.7days

Past Financial Proformance (Revenue, EPS)
FPE 2018: RM4.690 bil (10mths eps: 0.0513)
2017: RM5.501 bil (eps: 0.0566)
2016: RM5.257 bil (eps: 0.0537)
2015: RM4.714 bil (eps: 0.0323)

Net Profit Margin
FPE 2018: 4.7% (10 mths)
2017: 4.5%
2016: 5.1%
2015: 3.5%

After IPO Sharesholding
Emerging Glory: 52.8%

Director Remuneration for FYE2019 (from gross profit 2017)
Lau Chia Nguang: RM5.90 mil
Dato' Lau Eng Guang: RM4.86 mil
Tan Sri lau Tuang Nguang: RM5.04 mil
Lau Joo Hong: RM5.66 mil
Lau Joo Han: RM4.86 mil
Lau Joo Keat: RM4.90 mil
Other 8 director: RM0.902 mil
Total director remuneration from gross profit: 3.52%

Use of fund
Capital Expenditure: 75.5%
Working Capital: 12.0%
Lisitng Expenses: 12.5%

Competitor PE & ROE
QL:PE50.32, ROE11.48
Teoseng: PE11.86, ROE10.88
CP Food: PE n/a, ROE10.1
Japfa: Pe n/a, ROE0.2

Industry Analysis (Asean 2012-2018)
oultry Meat Consumption growth average per year: 5.2%
Animal Feed import average per year: 12.92%
Animal Feed production: 8.15%

Conclusion
Good thing is:
1. Produce necessity product (e.g. Egg)
2. Only depend on M'sia market 28.8%, other is export.
3. Trade receivable is less than 3 month.
4. Revenue is increase over 3 years.
5. 75.5% IPO fund use to expand business.
6. The needs of this industry is increasing because of population increasing.

The bad things:
1. Net profit margin very low (below 5%).
2. ROE is 12.5%, if 15% should be better.
3. NTA is RM0.42
4. Growth rate should not be very high because of net profit margin below 5%.

Conclusions
Overall is a slightly better IPO compare to normal IPO. Because of the needs of the industry, the demand will keep increasing. We should see a stable growth (but not big growth) in the company.
More suitable to investor that buy & keep as defensive portfolio.

IPO Price: RM1.10
Good time: RM1.28 (PE25)
Bad time: RM0.515 (PE10)