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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)