IPO Rating ( 2.25 star out of 5.0)
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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)