KGW GROUP BERHAD

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opinion and reader should take their own risk in investment decision.

Open to apply: 30 June 2023
Close to apply: 18 Jul 2023
Balloting: 21 July 2023
Listing date: 01 Aug 2023

Share Capital
Market cap: RM101.388 mil
Total Shares: 482,798,567 shares

Industry CARG
Growth Forecast of the Logistics Industry in Malaysia: 7.1% (forecast 2023-2027)
Industry competitors comparison (net profit%)
1.KGW Group: 7.1% (PE19.44)
2.FM Global: 4.3% (PE6.74)
3.Harbour-Link: 19.8%  (PE:2.48)
4.Infinity Logistics: 10.1%
5.See Hup: Losses
6.Transocean: 6.1% (PE83.33)
7.Forward Freight services S/B : 2.5%
8.Tri-Mode: 8.4% (PE11.51)
9.Worldgate Global: -9.7%
10.Dimerco Express: 3.4%
11.Interway Transport S/B: -3.3% 

Business (FYE 2022)
1.Logistics services
- ocean freight services, air freight services and freight forwarding services
2.Warehousing and distribution of healthcare-related products and devices
Revenue by Geo
1.Malaysia: 4.12%
2.North America: 71.84%
3.Others: 24.04%

Fundamental
1.Market: Ace Market
2.Price: RM0.21
3.Forecast P/E: PE19.44 (forecast FYE2023 EPS 0.0108)
4.ROE(Pro Forma III): nil%
5.ROE:  57.46%(FPE2022), 133.58%(FYE2021), 59.88%(FYE2020), 23.94%(FYE2019)
6.Net asset: RM0.12
7.Total debt to current asset: 0.8658 (Debt: 31.815mil, Non-Current Asset: 23.499mil, Current asset: 36.746mil)
8.Dividend policy: no formal dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2023 (FPE Q1): RM18.041 mil (Eps: 0.0027), PAT: 7.10%
2022 (FYE 31Dec): RM229.695 (Eps: 0.0338), PAT: 7.11%
2021 (FYE 31Dec): RM195.419 mil (Eps: 0.0326),PAT: 8.06%
2020 (FYE 31Dec): RM63.525 mil (Eps: 0.0045),PAT: 3.43%
2019 (FYE 31Dec): RM43.379 mil (Eps: 0.0007),PAT: 0.80%

Operating cashflow vs PBT
2022: 82.20%
2021: 97.93%
2020: 7.89%
2019: 158.88%

Trade Receivable vs Revenue
2022: 3.5%
2021: 10.65%
2020: 12.82%
2019: 11.90%

Major customer (FYE2022)
1.Rierden Chemical & Trading Company: 12.10%
2.PMB Silicon Sdn Bhd: 10.07%
3.Camel Energy Inc: 5.93%
4.CNC Cabinetry Inc: 4.33%
5.Interstate Batteries: 3.27%
***total 35.70%

Major Sharesholders
1.Dato’ Roger Wong: 61.05%
2.Cheok Hui Yen: 6.98%
3.Chow Enn Jie: 3.96%

Directors & Key Management Remuneration for FYE2023
(from Revenue & other income FYE2023 revenue forecast)
Total director remuneration: RM1.465 mil
key management remuneration: RM0.65 mil – RM0.80 mil
total (max): RM2.265 mil or 14.64%

Use of funds
1.Renovation of the Target Property: 11.95%
2.Repayment of bank borrowing: 59.78%
3.Working capital: 4.36%
4.Estimated listing expenses: 23.91%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is expensive IPO after they release quarter result Q1 2023 effected the company rating.

*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.