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Date
Open to apply: 29/01/2020
Close to apply: 06/02/2020
Listing date: 20/02/2020
Share Capital
Market Cap: RM480 mil
Total Shares: 705.881mil shares (Public Ballting: 16.1315 mil, Company Insider/Miti/Private Placement: 161.142 mil)
Business
The group hold The Body Shop franchises (beauty product) and operate TBS point-of-sale in Malaysia, Vietnam, & Combodia.
Geo
M'sia: 85.3%
Vietnam: 14.7%
Fundamental
Market: Main Market
Price: RM0.68 (9mth eps: RM0.0352)
*if final retail price is lower the RM0.68, difference will refund to applicants.
P/E & ROE: PE13.3 (Prospectus book is) ROE24%
Cash & fixed deposit after IPO: RM0.0132 per shares
NA after IPO: RM0.17
Total debt to current asset after IPO: 1.175 (Debt: 60.027 mil, Non-Current Asset: 129.622 mil, Current asset: 51.074 mil)
*Intangible asset: 52.973 mil
Dividend policy: Suggest 30% dividend policy profit after tax.
Financial Ratio
Trade receivable: 4.65 days
Trade Payable: 63.37 days
Inventory turnover: 191.84 days
Past Financial Proformance (Revenue, EPS)
2019 (9mths): RM138.195 mil (EPS: 0.0352)
2018: RM184.474 mil (EPS: 0.0722)
2017: RM171.919 mil (EPS: 0.0381)
2016: RM159.902 mil (EPS: 0.0424)
Net Profit Margin
2019: 18.0%
2018: 19.6%
2017: 17.8%
2016: 16.9%
After IPO Sharesholding
Dato' Simon (indirect): 71.89%
Datin Mina (indirect): 74.89%
Darly Foong: 3%
Molly Fong: 0.02%
Tengku Zatashah: 0.01%
Directors Remuneration for FYE2019 (from gross profit 2018)
Dato' Simon: RM60k
Datin Mina: RM0.693 mil
Darly Foong: -
Molly Fong: RM0.866 mil
Dato' Maznah: RM90k
Tengku Zatashah: RM80k
Total director remuneration from gross profit: RM1.789 mil or 1.43%
Key Management Remuration for FYE2019 (from gross profit 2018)
Jesse Siew: 500k-550k
Mae Chan: 400k-450k
Cang Yang: 400k-450k
Meng Leong: 250k-300k
Lily-Hue Nguyen: 800k-850k
Julie Wong: 300k-350k
key management remuneration from gross profit: RM2.650-2.950 mil or 2.13-2.37 %
Use of fund
Capital Expenditure: RM34.50 mil (68.5%)
Working Capital: RM3.80 mil (7.5%)
New Business development: RM5.7 mil (11.3%)
Listing expenses: RM6.37 mil (18.75%)
Industry CAGR%
Msia 2013-2018: 6.2% CARG on CPC (Cosmestics Personal Care)
Msia 2018-2023: 8.0% (forecast)
Vietnam 2013-2018: 12%
Vietnam 2018-2023: 11.6% (forecast)
*2002-2018 income per capital CAGR urban 14.8%, CAGR rural 16.1%
*Increase of female spending power.
*Increase of internet, mobile business & e-commerce.
*Growing of acceptance of natural products.
*Vietnam CPC (cosmetics personal care) CAGR 12% 2013-2018
Conclusions
Good thing is:
1. PE13 & ROE24% is attractive.
2. Every year net profit more than 15%
3. Revenue is increasing.
4. Director remuration & management fee is acceptable.
5. Cosmetics Personal Care market/industry expanding every year.
6. IPO fund is to expand into new business NATURA (also own by The Body Shop and Aesop brands).
The bad things:
1. Total debt is higher then current asset & cash per shares after IPO is low.
2. Net asset per shares RM0.17 & the group have Intangible asset 52.9mil (equal 29.3% of total asset).
3. Liting expenses 18.75% from IPO fund is too high (market average is around 11%-13%).
Conclusions
Is a attractive business. Increase of female spending power in Msia, Vietnam, & Combodia will continue to increase the growth of Comestics Personal Care industry. The business have intention to pay out 30% PAT as dividend, it should be an attractive dividend holding counter. This IPO is now perfer, because having Intangible asset 29.3% (normal acceptable level is less than 15%).
IPO Price: RM0.68
Good time: RM0.75 (PE16)
Bad time: RM0.42 (PE9)
*Valuation only valid until new quarter result release. Reader should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.