IPO Rating ( 1.5/5.0 Stars)
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Date
Open to apply: 30/06/2020
Close to apply: 09/07/2020
Listing date: 22/07/2020
Share Capital
Market Cap: RM106.860 mil
Total Shares: 411 mil shares (Public apply: 20.55mil, Company Insider/Miti/Private Placement: 102.570mil)
Industry
Industry CAGR%: 5.1% (Offshore Oilfield Services Industry Siza in M'sia 2010-2018)
Business
Upstream Oilfield Services(Eploration & Production) & Downstream (Refining)
-EPC & project management
-Supply of manpower
-Supply of materials, tools, & equipment
-Provision of drilling rig charter services
Fundamental
Market: Ace Market
Price: RM0.26 (EPS:0.0168)
P/E: PE15.48
ROE: 20.44 (IPO pro Forma III)
ROE: 20.44 (2019), 15.28 (2018), 8.92 (2017), 8.01 (2016)
Cash & fixed deposit after IPO: RM0.0541 per shares
NA after IPO: RM0.08
Total debt to current asset after IPO: 0.31 (Debt: 6.955mil, Non-Current Asset: 18.564mil, Current asset: 22.237mil)
Dividend policy: No fix dividend policy.
Past Financial Performance (Revenue, EPS)
2019: RM58,284 mil (EPS: 0.0168)
2018: RM30,492 mil (EPS: 0.0126)
2017: RM24,009 mil (EPS: 0.0073)
2016: RM17,645 mil (EPS: 0.0066)
Net Profit Margin
2019: 11.87%
2018: 16.97%
2017: 12.58%
2016: 15.36%
After IPO Sharesholding
Kenny Ronald Ngalin: 35.8%
Martin Philip King Ik Piau: 26.2%
Yau Kah Tak: 8%
Directors Remuneration for FYE2021 (from gross profit 2019)
Nor Azzam Bin Abdul Jalil: RM48k
Kenny Ronald Ngalin: RM336k
Martin Philip King Ik Piau: RM342k
Yau Kah Tak: RM336k
Tham Choi Kuen: RM30k
Iiham Fadilah Binti Sunhaji: RM30k
Reza-Rizvy Bin Ahmad Rony Assim: RM24k
Total director remuneration from gross profit: RM1.146 mil or 7.75%
Key Management Remuration for FYE2021 (from gross profit 2019)
Chang Vun Lung: RM250k-300k
Thomas Jalong: RM150k-200k
key management remuneration from gross profit: RM1.436mil or 6.95%
Use of fund
Broadening our range of support services: 15.14%
Capital expenditure for downstream O&G: 40.20%
Working capital: 30.62%
Listing Expenses: 14.04%
Good thing is:
1. PE15.48 consider at fair level.
2. ROE increasing over past 4 year.
3. Revenue increasig over past 4 years.
4. 85.96% IPO fund use to expand business.
5. Low debt company.
The bad things:
1. Industry CAGR 5.1% from 2010-2018, if we factor in inflation, basically is no growth industry CAGR. Oil & gas industry is more to sunset industry, as world is heading to green energy.
2. Net profit did not have good improvement.
3. Director fee is a bit expensive in percentage due to low gross profit.
4. No formal dividend policy.
Conclusions
The company is in challenging environment Industry CAGR 5.1% for 8 years, if we factor in inflation mean there is a negative growth industry. External factor will limit their growth in futures & the world is moving toward green energy. If the company continue stay in same industry, it might not suitable for long term investment.
IPO Price: RM0.26
Good time: RM0.265 (PE16)
Bad time: RM0.135 (PE8)
*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.