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Open to apply: 15/10/2021
Close to apply: 25/10/2021
Balloting: 28/10/2021
Listing date: 08/11/2021
Share Capital
Market Cap: RM115.5 mil
Total Shares: 350 mil shares
Follow us on facebook: https://www.facebook.com/LCH-Trading-Signal-103388431222067/
Open to apply: 15/10/2021
Close to apply: 25/10/2021
Balloting: 28/10/2021
Listing date: 08/11/2021
Share Capital
Market Cap: RM115.5 mil
Total Shares: 350 mil shares
Industry CAGR (2010-2020) & Competitor
M'sia Furniture production: CARG 3.8%
M'sia Furniture export: CARG 4.9%
Liihen: PE8.4 ROE15.79
Latitude: PE6.29 ROE9.31
Poh Huat: PE7.07 ROE13.55
Jaycorp: PE7.97 ROE15.48
SernKou: PE27.44 ROE15.78
SpringArt: PE16.93 ROE8.35
Business (Revenue in 2021)
Design & produce living room furniture, bedroom furniture, & others.
M'sia: 45.2%
Asia: 19.2%
Europe: 11.2%
North America: 14.9%
Australasia: 9.5%
M'sia Furniture production: CARG 3.8%
M'sia Furniture export: CARG 4.9%
Liihen: PE8.4 ROE15.79
Latitude: PE6.29 ROE9.31
Poh Huat: PE7.07 ROE13.55
Jaycorp: PE7.97 ROE15.48
SernKou: PE27.44 ROE15.78
SpringArt: PE16.93 ROE8.35
Business (Revenue in 2021)
Design & produce living room furniture, bedroom furniture, & others.
M'sia: 45.2%
Asia: 19.2%
Europe: 11.2%
North America: 14.9%
Australasia: 9.5%
Fundamental
1.Market: Ace Market
2.Price: RM0.33
3.P/E: 13.56 (EPS: 0.243)
4.ROE(Pro Forma III): 33.3% (forecast using 3mth FPE2022)
5.ROE: 71%(FYE2021), 68.8%(FYE2020), 148%(FYE2019)
6.Cash & fixed deposit after IPO: 0.066
7.NA after IPO: RM0.08
8.Total debt to current asset after IPO: 0.6929 (Debt: 29.133mil, Non-Current Asset: 15.879mil, Current asset: 42.048mil)
9.Dividend policy: doest not have formal dividend policy.
Past Financial Performance (Revenue, Earning Per shares, PAT%)
2022: (3mths): RM18.794 mil (Eps: 0.0069),PAT%: 12.8%
2021: RM56.342 mil (Eps: 0.0243),PAT%: 15.1%
2020: RM42.398 mil (Eps: 0.0166),PAT%: 12.3%
2019: RM24.141 mil (Eps: 0.0095),PAT%: 13.8%
***FYE 2021 (is Mar2020-Feb2021)
***FPE 2022 (Mar2021-May2021)
1.Market: Ace Market
2.Price: RM0.33
3.P/E: 13.56 (EPS: 0.243)
4.ROE(Pro Forma III): 33.3% (forecast using 3mth FPE2022)
5.ROE: 71%(FYE2021), 68.8%(FYE2020), 148%(FYE2019)
6.Cash & fixed deposit after IPO: 0.066
7.NA after IPO: RM0.08
8.Total debt to current asset after IPO: 0.6929 (Debt: 29.133mil, Non-Current Asset: 15.879mil, Current asset: 42.048mil)
9.Dividend policy: doest not have formal dividend policy.
Past Financial Performance (Revenue, Earning Per shares, PAT%)
2022: (3mths): RM18.794 mil (Eps: 0.0069),PAT%: 12.8%
2021: RM56.342 mil (Eps: 0.0243),PAT%: 15.1%
2020: RM42.398 mil (Eps: 0.0166),PAT%: 12.3%
2019: RM24.141 mil (Eps: 0.0095),PAT%: 13.8%
***FYE 2021 (is Mar2020-Feb2021)
***FPE 2022 (Mar2021-May2021)
After IPO Sharesholding
Jason Koh Jian Hui: 33.1%
Koh Cheng Huat: 33.1%
Directors & Key Management Remuneration for FYE2022 (from gross profit 2021)
Total director remuneration: RM1.128 mil
key management remuneration: RM0.5 mil- 0.75 mil
total (max): RM1.878 mil or 10.6%
key management remuneration: RM0.5 mil- 0.75 mil
total (max): RM1.878 mil or 10.6%
Use of fund
Machinery & equipment: 37.1%
Factory & hostel contrustion: 12.4%
Purchase of raw material: 32.6%
Listing expenses: 17.9%
Highlight
1. Factory A: Currently have 4 production line & want to increase 1 production line.
2. Muar Furniture Park: New factory 3 production line (Q4,2022 expected to be commerce).
3. Co-founder Age: Jason Koh(Aged 29), Koh Cheng Huat (Aged 44).
4. Incorporation in 2016: expand rapidly & take 5 year to listing in 2021
Good thing is:
1. ROE is above 30%
2. Revenue is double compare past 3 year.
3. 82.1% IPO fund use to expand business.
4. Both co-founder still below Age 50 (abilities to continue lead business to expand)
The bad things:
1. Selling PE is high compare to other competitor.
2. Concentration of customer base 39.8% (from 4 major customers).
3. Highly dependent on co-founder Jason Koh & Koh Cheng Huat to success & growth in business since 2016.
Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Is a good IPO. Quite impressive because incorporate 2016 and IPO within 5years. The weakness is IPO price is expensive compare to average market PE. In consider of the additional production line PE13.56 still acceptable.
*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.