Initial Public Offering (IPO): February 2021

Sunday, February 28, 2021

Teladan Setia Group Berhad

Open to apply: 23/02/2021
Close to apply: 02/03/2021
Listing date: 16/03/2021

Share Capital
Market Cap: RM386.543mil
Total Shares: 805.298 mil shares (Public apply: 40 mil, Company Insider/Miti/Private Placement/other: 161.595mil)

Industry (Net Profit %)
Property development

Business
Business mainly in Melaka
Residential: 51%
Mixed development: 49%

Fundamental
1.Market: Ace Market
2.Price: RM0.48 (EPS:RM0.054)
3.P/E: PE8.9
4.ROE(Pro Forma III): 10.36%
5.ROE: 12.60%(2019), 16.19%(2018), 22.27%(2017)
6.Cash & fixed deposit after IPO: RM0.1153 per shares
7.NA after IPO: RM0.54
8.Total debt to current asset after IPO: 0.56 (Debt: 214.877mil, Non-Current Asset: 266.719mil, Current asset: 381.972mil)
9.Dividend policy: 20% of PAT as dividend.

Past Financial Performance (Revenue, EPS)
2020 (9mths): RM100.028 mil (EPS:0.022)
2019: RM232.988 mil (EPS:0.054)
2018: RM259.141 mil (EPS:0.061)
2017: RM359.511 mil (EPS:0.078)

Net Profit Margin
2020 (9mths):19.1%
2019: 18.6%
2018: 18.8%
2017: 17.49%

After IPO Sharesholding
Teo Lay Ban: 41.6%
Teo Lay Lee: 11.1%
Teo Siew May: 11.1%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2019)
Total director remuneration: RM1.678 mil or 2.08%
key management remuneration: RM0.90 mil-1.05mil or 1.12%-1.30%
total (max): RM2.728mil or 3.38%

Use of fund
Land acquisition: 45.3%
Working capital for project development: 42.8%
Repayment of bank borrowings: 5.2%
Listing Expenses: 6.7%

Good thing is:
1. IPO price fair with the company value, PE8.9.
2. Have profit margin of 17%-19% rannge.
3. Directors & Key Management Remuneration is not too expensive.

The bad things:
1. Property development industry is effected by current overall economic.
2. ROE is less than 15%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion)
Overall is fair valuation, but current economic situation is not encouraging property market to grow. Property market will need to wait at least more than 2 year to better demand. Invest in this IPO might need more time to wait and need to continue monitoring their performance. For business growth & business risk please refer to 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.

Saturday, February 6, 2021

Mobilia Holdings Berhad

Follow us on facebook: https://www.facebook.com/LCH-Trading-Signal-103388431222067/

Open to apply: 03/02/2021
Close to apply: 09/02/2021
Listing date: 23/01/2021

Share Capital
Market Cap: RM92mil
Total Shares: 400 mil shares (Public apply: 20mil, Company Insider/Miti/Private Placement/other: 80mil)

Industry (Net Profit %)
Homeriz: 15.18%
Spring Art: 13.14%
Mobilia: 11.14%
Liihen: 9.51%

Business
Design & Manufacturing of home furniture.
Oversea: 73.39%
Malaysia: 26.61%
*2017-2020: 50.48%-56.48% revenue come from 5 major customer.

Fundamental
1.Market: Ace Market
2.Price: RM0.23 (EPS:0.02)
3.P/E: PE11.50
4.ROE(Pro Forma III): 17.29%
5.ROE: 35.71%(2019), 27.55%(2018), 31.45%(2017)
6.Cash & fixed deposit after IPO: RM0.0406 per shares
7.NA after IPO: RM0.10
8.Total debt to current asset after IPO: 1.176 (Debt: 39.385mil, Non-Current Asset: 45.954mil, Current asset: 33.447mil)
9.Dividend policy: No fixed dividend policy.

Past Financial Performance (Revenue, EPS)
2020 (8mths): RM44.729 mil (EPS:0.0136)
2019: RM75.589 mil (EPS:0.0248)
2018: RM66.504 mil (EPS:0.0184 )
2017: RM55.730 mil (EPS:0.0184)

Net Profit Margin
2020 (8mths): 10.31%
2019: 11.14%
2018: 9.39%
2017: 11.24%

After IPO Sharesholding
Quek Wee Seng: 74.56% (Exelient & Firstchrome)
Quek Wee Seong: 73.88% (Exelient & Firstchrome)

Directors Remuneration for FYE2021 (from gross profit 2019)
Datin Siah Li Mei: RM42k
Quek Wee Seng: RM577k
Quek Wee Seong: RM474k
Tajul Arifin: RM42k
Lim See Tow: RM42k
Total director remuneration: RM1.177 mil or 6.05%

Key Management Remuneration for FYE2021 (from gross profit 2019)
Tan Ley Wun: RM150k-200k
Khoo Ai Lee: RM150k-200k
Ku Yong Yee: RM100k-150k
Wong Eng Chuan: RM200k-250k
Quek Yan Song: RM50k-100k
key management remuneration: RM0.65mil-0.9mil or 3.34-4.62%

Use of fund
Construction of building: 42.03%
Purchase of machineries: 9.42%
Repayment of borrowings: 13.77%
Working capital: 13.77%
Listing Expenses: 21.74%

Good thing is:
1. PE11.5 is acceptable fair value.
2. ROE above 15%.
3. Revneue continue increase over past 3 years.
4. Global work from home trend increase demand of furniture.

The bad things:
1. Top 5 major customer contribute over 50% of company revenue.
2. Debt is high.
3. Director & top management remuneration is over 10% from company gross profit.
4. Use 13.77% IPO fund to pay debt, & listing expenses is 21.74% of total IPO fund (this 2 item is less help to contribute business growth in futures)

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion)
The company choosen the right timing to IPO as global work from home increase demand of furniture, however Mobilia furniture is more focus on wood based furniture. The exstimated completion time for factory block B & C is 2022, we should see more revenue come in after 2 years time (unable to find out how many % increase in production capacity). Please refer below chart to understand the risk vs business growth forecast for the company within 3 years.

*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.