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)