DAYTHREE DIGITAL 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: 21 Jun 2023
Close to apply: 11 July 2023
Balloting: 14 Jul 2023
Listing date: 26 Jul 2023

Share Capital
Market cap: RM144 mil
Total Shares: 480 mil shares

Industry CARG
Estimated Market Size and Growth Forecast for the GBS Industry in Malaysia, 2020-2027: 6.3%
Industry competitors comparison (PAT%)
Daythree: 9.6%
Scicom: 11.9% (PE12.06)
Aegis BPO Malaysia S/B: 17.4%
TDCX (MY) S/B: 19.9%
Teleperformance Malaysia S/B: 12.1%
Others (6 company) : 7.5% to 11.4% 
Others (4 company): -62.17% to 2.2%

Business (FYE 2022)
GBS services provider (Gobal Business Services) focusing on CX lifecycle management services (customer experience) enabled by in-house developed digital tools. 
***for easy understanding, is a type outsourcing services company that focus on customer experience segment.
Customer Segment (FYE2022)
1.Energy & utilities: 48.9%
2.Telecommunications & media: 23.4%
3.Fintech & financial services: 15.4%
4.Construction: 3.8%
5.Others: 8.5%

Fundamental
1.Market: Ace Market
2.Price: RM0.30
3.Forecast P/E: 23.1 @ EPS0.013 
4.ROE(Pro Forma III): 11.01% 
5.ROE: 23.60%(FYE2022), 34.12%(FYE2021), 29.43%(FYE2020), 24.68%(FYE2019)
6.Net asset: RM0.12
7.Total debt to current asset IPO: 30.92 (Debt: 19.639mil, Non-Current Asset: 12.874mil, Current asset: 63.521mil)
8.Dividend policy: no formal dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2022 (FYE 31Dec): RM65.105 mil (Eps: 0.013),PAT: 9.6% 
2021 (FYE 31Dec): RM58.133 mil (Eps: 0.020),PAT: 16.6%
2020 (FYE 31Dec): RM47.713 mil (Eps: 0.012),PAT: 11.8%
2019 (FYE 31Dec): RM37.463 mil (Eps: 0.008),PAT: 10.2%

Order Book/Contract
Currently have: 19 contract
 - Renewable: 1 contract
 - Non-renewable: 17 contract (RM66.7mil @ 5contract, 13contract by rendered)
 - FYE2022 expired & renewed: 1 contract  

Operating cashflow vs PBT
2022: 83.39%
2021: 65.12%
2020: 56.55%
2019: 70.74%

Major customer (2022)
Client G: 29.0% 
Client F: 19.9% 
Client E: 18.4% 
Client D: 10.3% 
Client A: 4.9%
***total 82.5%

Major Sharesholders
Dayspring Capital: 36% (direct)
Paul Raymond Raj A/L Davadass: 36% (indirect)
Cloud Marshal: 23.1%
BLM Holdings: 15.4% (direct)
Thanos capital: 23.1% (indirect)
Gan Jhia Jhia: 23.1% (indirect)
Leong Kok Cheng: 23.1% (indirect)
Lee King Loon: 23.1% (indirect)
Bernadine Lee Siew Ling: 15.4% (indirect)

Directors & Key Management Remuneration for FYE2023
(from Revenue & other income 2022)
Total director remuneration: RM1.275mil
key management remuneration: RM0.90mil – RM1.15mil
total (max): RM2.425 mil or 14.79%

Use of funds
1. Office expansion: 21.4%
2. Recruit industry experts to capture growth opportunities: 9.1%
3. Capital expenditure in networking infrastructure, IT hardware and software: 9.1%
4. Branding, marketing and promotional activities: 4.5%
5. Working capital: 44.4%
6. Estimated listing expenses: 11.5%

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 good IPO. Their IPO PE is a bit expensive, but the company is having fast growth performance. 

*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.