Coraza Integrated Technology Berhad

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***Important***Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision

Open to apply: 22/12/2021
Close to apply: 06/01/2022
Balloting: 10/01/2022
Listing date: 20/01/2022

Share Capital
Market Cap: RM119.932 mil
Total Shares: 428.331mil shares
 
Industry Competitor PAT
Coraza: 9.6% (PE19)
Alpha: -7.7%
Frencken: 6.1% (PE18, SGX Mrk)
Kobay: 17.2% (PE60)
Synturn: 17.4% 
UWC: 26.4% (PE68)

Business (2021)
Sheet metal fabrication, Percision machining, & sub-modular assembly. 
Semicoductor: 56.5%
Instrumentation: 17.9%
Life science & medical devices: 18.7%
Aerospace, telecommunication and E&E: 6.9%

Revenue by Geo (2021)
M'sia: 61.9%
S'pore: 28.3%
USA: 7.8%
Others: 0.4%
Euro: 1.6%

Fundamental
1.Market: Ace Market
2.Price: RM0.28
3.P/E: 19 (EPS:0.0147)
4.ROE(Pro Forma III): 16.97% (forecast using 6mth FPE2021)
5.ROE: 27.4%(FYE2020), 12.2%(FYE2019), 14%(FYE2018)
6.NA after IPO: RM0.15
7.Total debt to current asset after IPO: 0.969(Debt: 44.952 mil, Non-Current Asset: 62.337 mil, Current asset: 46.386 mil)
8.Dividend policy: no formal dividend policy. 
 
Past Financial Performance (Revenue, Earning Per shares, PAT%)
2021 (6mths): RM43.195 mil (Eps:0.0126),PAT: 12.5%
2020: RM83.686 mil (Eps:0.0147),PAT: 7.5%
2019: RM58.594 mil (Eps:0.0080),PAT: 5.8%
2018: RM56.023 mil (Eps:0.0081),PAT: 6.2%

After IPO Sharesholding
Paul Heng Weng Seng: 48.3%
Liew Sow Ying: 19.3%
Lim Teik Hoe: 19.3% (indirect)

Directors & Key Management Remuneration for FYE2022 (from gross profit 2020)
Total director remuneration: RM0.73 mil
key management remuneration: RM0.6mil - 0.85mil
total (max): RM1.58 mil or 7.4%  
 
Use of fund
Purchase of new machinery: 47%
Construction of factory: 19.5%
Implementation of ERP system: 3.6%
Extension of existing buidling: 4.6%
Repayment of bank borrowings: 13.9%
Listing expenses: 11.4%

Highlight
1. New factory will increase 25% capicity (estimated completed by Dec2023). 

Good thing is:
1. Semiconductor industry on growing stage, PE19 is acceptable. 
2. ROE still above 15%.
3. Revenue growing for past 3 years. 
4. Director & key management remuneration is not high. 
5. IPO for expand business capacity. 
 
The bad things:
1. The company having concentration risk on 2 customer (66%-77% trade receivable from 2018-2021).
2. Director averaging above age 60. 
3. Competitor in same industry have better performance. 

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is still a discount IPO compare to their competitor that get high PE in same industry. After IPO should able to back to acceptable PE30 & above. 

*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.

SWIFT HAULAGE BERHAD

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Open to apply: 30/11/2021
Close to apply: 07/12/2021
Price determination date: 08/12/2021
Balloting: 09/12/2021
Listing date: 21/12/2021

Share Capital
Market Cap: RM916.5 mil
Total Shares: 889.8045mil shares
***Issue price RM1.03 (final price will finalise after institution offer completed)

Industry Competitor PE
Tasco: PE14
Freight Management:PE13.8
CJCen: PE50.46
Tnlogis: PE24.92
Xinhwa: PE19.34

Business (2021)
Integrated logistics services: Container haulage, land transportion, freight forwarding, warehousing & container depot. 
Other services: 3S for commercial vehicles, general insurance agency, E-commerce retailing. 

Revenue by Geo (2021)
Msia: 93.8%
Thailand: 2.8%
other countries: 3.4%

Fundamental
1.Market: Main Market
2.Price: RM1.03 (final price determined 08/12/2021)
3.P/E: 21.5 (EPS: 0.048)
4.ROE(Pro Forma III): 8.89% (forecast using 5mth FPE2021)
5.ROE: 9.8%(FYE2020), 9.45%(FYE2019), 12.17%(FYE2018)
6.Cash & fixed deposit after IPO: 0.0155
7.NA after IPO: RM0.35
8.Total debt to current asset after IPO: 3.1 (Debt: 0.751 bil, Non-Current Asset: 1.093 bil, Current asset: 0.235 bil)
9.Dividend policy: PAT 30% dividend policy. 
 
Past Financial Performance (Revenue, Earning Per shares, PAT%)
2021 (5mths): RM248.533 mil (Eps: 0.025),PAT: 9.0%
2020: RM555.838 mil (Eps: 0.047),PAT: 7.6%
2019: RM610.201 mil (Eps: 0.041),PAT: 6.1%
2018: RM496.979 mil (Eps: 0.046),PAT: 8.3%
***EPS is base on comprehesiove income divided 899.8045 mil shares (Diluted EPS in prospectures book didn't use enlarged shares after IPO). 

After IPO Sharesholding
Loo Yong Hui: 35.87% (indirect)
Dato' Haji Md Yusof: 35.87% (indirect)
Loo Hooi Keat: 35.87% (indirect)

Directors & Key Management Remuneration for FYE2022 (from gross profit 2020)
Total director remuneration: RM2.996 mil
key management remuneration: RM6 mil- 6.45 mil
total (max): RM9.446 mil or 5.09%  

Use of fund
Constuction of new warehouse: 17.6% (currently have 6 warehouse)
Puchase of land: 25.7% (currently have 2.381 mil sq haulage yards)
Purchase of 30 prime movers: 7.4% (currently have 966 Prime mover, 5402 trailers)
Repayment bank borrowings: 43.1%
Listing expenses: 6.2%

Highlight
1. New warehouse in Port Klang (estimated complete build 2nd quarter 2022). 
2. Acquisition of cold-chain logistics companies (3rd quarter 2022).

Good thing is:
1. Director & key management remuneration below 10%. 

2. The company business is almost near to life necessity and economic necessity industry. 
 
The bad things:
1. PE21.5 is above market average PE. 
2. ROE below 15%
3. Debt to current asset ratio is too high. 
4. Revenue did not growth much 2018-2021. 
5. PAT% margin is less than 10%, & averege industry competiror PAT also not over 10% PAT (profit after tax margin)
6. 43.1% IPO use to repayment of bank borrowing. 
7. Swift have 6 warehouse, expand 1 new warehouse highly chance will not double their revenue in 5 year. 

8. Purchase of 30 prime mover is small percentage of the total vehicle they have. 

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is an expensive IPO. The industry profit after tax margin for the company averagely is below 10 (Swift PAT:  7.6%). Company IPO PE is a bit higher then the industry average. 

*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.