IPO

Tuesday, December 13, 2022

NATIONGATE HOLDINGS BERHAD

Copyright@http://lchipo.blogspot.com/
Follow us on facebook: https://www.facebook.com/LCH-Trading-Signal-103388431222067/

***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: 12/12/2022
Close to apply: 30/12/2022
Balloting: 04/01/2023
Listing date: 12/01/2023

Share Capital
Market cap: 788.094mil (will depend on final IPO price)
Total Shares: 2.0739bil shares
 
Industry CARG
Forecast M'sia EMS industry 2022-2027 CARG: 10.3%
Competitor comparison
NGH: 7.8% (IPO PE11.9)
ATAIMS: -1.9% (PE-6.74)
Aurelius: 6% (PE30)
PIE: 5.9% (PE16)
SKPRES: 7.5% (PE14.51)
SMT technologies: 3% (GE, PE12)
VS: 6% (PE21.2)

Business (FYE 2022)
EMS provider focusing on the assembly and testing. 
(a) electronic components and products to produce completed PCBs, semi-finished subassemblies and fully-assembled electronic products.
(b) semiconductor devices.
Revenue by Geo
Msia: 74.4%
Others: 25.6%

Fundamental
1.Market: Ace Market
2.Price: RM0.38
3.P/E: 11.9 @ RM0.0318
4.ROE(Pro Forma III): 19.90%
5.ROE: 38.20%(FYE2021), 27.37%(FYE2020), 6.16%(FYE2019)
6.NA after IPO: RM0.16
7.Total debt to current asset after IPO: 0.84 (Debt: 457.459mil, Non-Current Asset: 248.833mil, Current asset: 544.138mil)
8.Dividend policy: no formal dividend policy. 
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2022 (FYE 30Jun, 6mths): RM426.002 mil (Eps: 0.0159),PAT: 7.8%
2021 (FYE 31Dec): RM760.870 mil (Eps: 0.0276),PAT: 7.8%
2020 (FYE 31Dec): RM566.246 mil (Eps: 0.0148),PAT: 5.4%
2019 (FYE 31Dec): RM325.998 mil (Eps: 0.0025),PAT: 1.6%

Operating cashflow vs Profit before Tax (amended)
2022: 13.37%
2021: 46.19%
2020: 139%
2019: -ve

Major customer (2022)
1. Company A (Fully-assembled electronic products): 54.8%
2. Company B (Fully-assembled electronic products): 10.5%
3. Robert Bosch Power Tools Sdn Bhd (Completed PCBs): 9.2%
4. Company C (Completed PCBs): 5.6%
5. Company B (Completed PCBs): 2.9%
***total 83%

Major Sharesholders
Ooi Eng Leong: 57.8% (direct)
Tan Ah Geok: 7.2% (direct)

Directors & Key Management Remuneration for FYE2023 (from Revenue & other income 2022)
Total director remuneration: RM2.783mil
key management remuneration: RM1.45mil - RM1.70mil
total (max): RM4.483 mil or 7.488% 
Use of funds
1. Purchase of machineries and equipment: 3.6%
2. Working capital requirements: 29.2%
3. Repayment of bank borrowings: 63.8%
4. Listing Expenses: 3.4%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is a low net profit margin industry. The operating cashflow vs PBT drop below 20%, & risk of highly depend on foreign worker. Hence, this IPO will category into high risk category area for rating. (Amended) 

*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.