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Date
Open to apply: 02/01/2020
Close to apply: 10/01/2020
Listing date: 22/01/2020
Share Capital
Market Cap: RM145.138 mil
Total Shares: 580.552mil shares (Public Ball0ting: 23.8 mil, Company Insider/Miti/Private Placement: 121.655mil)
Business
Manufacturing & trading of electricity distribution product.
-LV switchboards, MV switchgears, & related product.
Fundamental
Market: Ace Market
Price: RM0.25 (7mth eps: RM0.0059)
P/E & ROE: PE17.12 (Prospectus book is PE11.96), ROE9.12%
Cash & fixed deposit after IPO: RM0.0298 per shares
NA after IPO: RM0.11
Total debt to current asset after IPO: 0.45 (Debt: 32.834 mil, Non-Current Asset: 24.885 mil, Current asset: 72.383 mil)
Dividend policy: No formal dividend policy.
Financial Ratio
Trade receivable: 168.6 days
Trade Payable: 179.3 days
Inventory turnover: 127.5 days
Past Financial Proformance (Revenue, EPS)
2019 (7mths): RM44.499 mil (EPS: 0.0059)
*order books RM52.21, billed progressively 24mths
2018: RM105.352 mil (EPS: 0.0209)
2017: RM106.393 mil (EPS: 0.0239)
2016: RM92.539 mil (EPS: 0.0146)
Net Profit Margin
2019: 7.7%
2018: 11.5%
2017: 13.0%
2016: 9.1%
After IPO Sharesholding
PW Synergy 51% (Indirect Jason Tham, Catherine Wong)
Jason Tham: 7.18%
Catherine Wong: 7.02%
Ricky Lee: 3.04%
Directors Remuneration for FYE2019 (from gross profit 2018)
Tang Yuen Kin: RM57k
Dr.Tou Teck Yong: RM51k
Selma Enolil Binti Mustapha Khalil: RM51k
Jason Tham: RM0.867 mil
Catherine Wong: RM0.706 mil
Ricky Lee: RM0.664 mil
Total director remuneration from gross profit: RM2.396 mil or 8.31%
Key Management Remuration for FYE2019 (from gross profit 2018)
Hoh Moon Heng: 300k-500k
Thong Kok Meng: 200k-250k
Ir.Leong Yek Loong: 350k-400k
Soh Wei Wei: 300k-350k
Chai Jsung Kek: 100k-150k
key management remuneration from gross profit: RM1.250mil-1.65mil or 4.34-5.73%
Use of fund
Capital Expenditure: RM10.270 (47%)
Certification expenditure : RM3.865 mil (17.69%)
Working Capital: RM3.615 mil (16.55%)
Listing expenses: RM4.1 mil (18.75%)
Competitors (Market Player PAT)
ABB Malaysia S/B: 3.85%
Tamco Switchgear: 2.8%
Toshiba Transmission & Distribution: losses
SRS Power Enginnering: 10.34%
Sun System Engineering S/B: 3.31%
INDKOM: 21.65%
Swift Energy S/B: 5.35%
Fuji SMBE: 7.56%
MCC Techique: 1.67%
Matrix Power Network: 1.27%
Gathergates Industries (M)S/B: losses
Conclusions
Good thing is:
1. Major sharesholder hold big portion on company stock.
2. Most of the IPO fund use to business expansion.
The bad things:
1.PE17.12 is not attractive.
2.Business natural need long time to collect payment trade receivable 168days.
3.Revenue & net profit margin is dropping over 3 years.
4.Director remuration + key management remuration is 12.65%-14.04% from gross profits, this is too high.
5.Compare with many competitors, most of them unable to make net profit over 10%, this industry is likely not given high margin return.
6.Listing in Ace Market.
Conclusions
Avoid this IPO.
IPO Price: RM0.25
Good time: RM0.16 (PE11)
Bad time: RM0.115 (PE8)