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Open to apply: 15/12/2020
Close to apply: 07/01/2021
Listing date: 20/01/2021
Share Capital
Market Cap: RM139.8345mil
Total Shares: 388.43mil shares (Public apply: 19.4216mil, Company Insider/Miti/Private Placement/other: 89.2474mil)
Industry
Printing Industry CAGR 2016-2019: 6.04%
Top Five Industry Player (by PAT Margin)
Kinta Press & Packaging S/B: 20.98%
GL Printing S/B: 18.99%
Thumbprints Utd S/B: 13.47%
Hin Press S/B: 9.10%
Hayan Group (HPP): 8.72%
Business
Printing & production of paper-based packaging.
*Standard format machine utilisation rate 88.44%
*Currently 6 machines (5 in production line, 1 for training purpose)
*IPO add 2 machines (will dispose on old machines)
*Forecast printing capacity increase 20%
Revenue from Malaysia: 72.44%
Revenue from Oversea: 27.56%
Fundamental
1.Market: Ace Market
2.Price: RM0.36 (EPS:0.0212)
3.P/E: PE16.98
4.ROE(Pro Forma III): 8.885%
5.ROE: 12.72%(2020), 22.76%(2019), 28.82%(2018)
6.Cash & fixed deposit after IPO: RM0.0878 per shares
7.NA after IPO: RM0.25
8.Total debt to current asset after IPO: 0.4655 (Debt: 28.566mil, Non-Current Asset: 66.417mil, Current asset: 61.360mil)
9.Dividend policy: 20% Net profit dividend payout ratio policy.
Past Financial Performance (Revenue, EPS)
2020: RM101.203 mil (EPS: 0.0212)
2019: RM82.681 mil (EPS: 0.0343)
2018: RM64.395 mil (EPS: 0.0384)
Net Profit Margin
2020: 8.71%
2019: 16.53%
2018: 23.19%
After IPO Sharesholding
Aurora Meadow S/B: 51.72%
Kok Hon Seng: 5.94% (indirect 55.3%)
Lau Teee Tee @ Lau Kim Wah: 1.98% (indirect 53.51%)
Ng Soh Hoon: 3.58% (indirect: 57.66%)
Chong Fea Chin: 1.79% (indirect 53.7%)
Ang Poh Geok: 7.01%
Directors Remuneration for FYE2021 (from gross profit 2020)
Lau Tee Tee @ Lau Kim Wah: RM100k
Kok Hon Seng: RM0.954 mil
Ng Soh Hoon: RM0.216 mil
Philip Goh Teck Siang: RM60k
Choo Chee Beng: RM36k
Lee Chong Leng: RM36k
Total director remuneration: RM1.402 mil or 6.77%
Key Management Remuneration for FYE2020 (from gross profit 2019)
Tan Kian Siong @ Chen Kian Siong: RM0.251mil-0.3 mil
Mah Chen Wah: RM0.151mil-0.2mil
Ng Soh Moy: RM0.151mil-0.2mil
Teng Tiang Chia: RM0.201mil-0.25mil
Lee Kuei Yong: RM0.051mil-0.1mil
Subramaniam A/L Mogan: RM0.101mil-0.15mil
Nur Syafiqah Binti Hassan: RM0-0.05mil
key management remuneration: RM0.906mil-1.25mil or 4.38%-6.04%
Use of fund
Capital expenditure and expansion: 40.82%
Repayment of bank borrowing: 24.38%
Working capital: 16.31%
Sales and marketing expenses: 6.27%
Listing Expenses: 12.22%
Good thing is:
1. PE 16.98 under acceptable range.
2. Revenue increase over 3 years.
3. Major sharesholder hold by Aurora Meadow S/B, will have less large dispose of shares activities after IPO.
4. After IPO forecast printing capicity increase 20%.
The bad things:
1. ROE & EPS dropping over 3 years.
2. 16.31% IPO fund allocate to pay back bank borrowing.
3. Industry CAGC is not in high growth.
4. HPP is not major market player among their competitors.
5. Director & top management remuneration is over 10% of the company gross profit.
Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion)
The IPO is at fair value.Estimated after completed install the new printing machine will have increase of printing capacity 20% that will increase revenue. However the business is not going to increase 100% in one or two years, as revenue also need to come with printing capacity. We might not see very high growth of business. (WARNING: business growth is not shares price growth)
for Risk vs business growth potential please refer below chart.
Lau Tee Tee @ Lau Kim Wah: RM100k
Kok Hon Seng: RM0.954 mil
Ng Soh Hoon: RM0.216 mil
Philip Goh Teck Siang: RM60k
Choo Chee Beng: RM36k
Lee Chong Leng: RM36k
Total director remuneration: RM1.402 mil or 6.77%
Key Management Remuneration for FYE2020 (from gross profit 2019)
Tan Kian Siong @ Chen Kian Siong: RM0.251mil-0.3 mil
Mah Chen Wah: RM0.151mil-0.2mil
Ng Soh Moy: RM0.151mil-0.2mil
Teng Tiang Chia: RM0.201mil-0.25mil
Lee Kuei Yong: RM0.051mil-0.1mil
Subramaniam A/L Mogan: RM0.101mil-0.15mil
Nur Syafiqah Binti Hassan: RM0-0.05mil
key management remuneration: RM0.906mil-1.25mil or 4.38%-6.04%
Use of fund
Capital expenditure and expansion: 40.82%
Repayment of bank borrowing: 24.38%
Working capital: 16.31%
Sales and marketing expenses: 6.27%
Listing Expenses: 12.22%
Good thing is:
1. PE 16.98 under acceptable range.
2. Revenue increase over 3 years.
3. Major sharesholder hold by Aurora Meadow S/B, will have less large dispose of shares activities after IPO.
4. After IPO forecast printing capicity increase 20%.
The bad things:
1. ROE & EPS dropping over 3 years.
2. 16.31% IPO fund allocate to pay back bank borrowing.
3. Industry CAGC is not in high growth.
4. HPP is not major market player among their competitors.
5. Director & top management remuneration is over 10% of the company gross profit.
Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion)
The IPO is at fair value.Estimated after completed install the new printing machine will have increase of printing capacity 20% that will increase revenue. However the business is not going to increase 100% in one or two years, as revenue also need to come with printing capacity. We might not see very high growth of business. (WARNING: business growth is not shares price growth)
for Risk vs business growth potential please refer below chart.
*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.