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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)