CPE TECHNOLOGY BERHAD

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

Open to apply: 20 Nov 2023
Close to apply: 24 Nov 2023
Balloting: 28 Nov 2023
Listing date: 07 Dec 2023

Share Capital
Market cap: RM263.948 mil
Total Shares: 671,314,791 shares

Industry CARG (2017-2022)
Growth Forecast of the ESI in Malaysia CAGR (2023-2027) (base year of 2022): 8.2%
Industry competitors comparison (PAT%)
CPE Technology Group: 20.85% (PE23.46)
Coraza: 10.26% (PE25.08)
Frencken: 9.00% (PE12, SGX listed)
Kobay: 8.16% (PE30.06)
SFP: 37.28% (PE61.62)
UWC: 30.89% (PE72.69)

Business (FYE 2023)
Manufacturing of precision-machined parts and components and provision of CNC machining services.
Revenue by Geo
USA: 53.53%
Singapore: 32.23%
Malaysia: 11.63%
Others: 2.61%

Fundamental
1.Market: Main Market
2.Price: RM1.07
3.Forecast P/E: 23.46  @ EPS RM0.0456
4.ROE(Pro Forma III): 9.8% 
5.ROE: 22%(FYE2023), 32.73(FYE2022),  32.76%(FYE2021), 10.72%(FYE2020), 13.16%(FYE2019)
6.Net asset: 0.61
7.Total debt to current asset: 0.4511 (Debt: 57.897mil, Non-Current Asset: 67.247mil, Current asset: 128.338mil)
8.Dividend policy: 25% to 50% PAT dividend policy.
9.Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2023 (FYE 30 June): RM145.275 mil (Eps: 0.0456),PAT: 21.05%
2022 (FYE 30 June): RM138.846 mil (Eps: 0.0532),PAT: 25.74% 
2021 (FYE 30 June): RM93.444 mil (Eps: 0.0265),PAT: 19.06%
2020 (FYE 30 June): RM79.013 mil (Eps: 0.0142),PAT: 12.03%
2019 (FYE 30 June): RM78.352 mil (Eps: 0.0155),PAT: 13.29%
Order Book
2029: RM4.207 mil
2025: RM21.788 mil
2024: RM42.271 mil

Major customer (2023)
1.Healthcare Customer Group 1: 19.63%
2.Semiconductor Customer 2: 19.44%
3.Fujikin Group: 15.72%
4.Semiconductor Customer Group 1: 12.77%
5.Sport Equipment Customer 1: 10.73%
***total 78.29%

Major Sharesholders
1.Lee Chen Yeong: 32.5%
2.Foo Ming: 19.5%
3.Mu Woon Chai: 13%

Directors & Key Management Remuneration for FYE2024
(from Revenue & other income 2023)
Total director remuneration: RM2.297mil
key management remuneration: RM2.80mil – RM3.050mil
total (max): RM5.347 mil or 10.38%

Use of funds
1.Acquisition new industrial land & construction of new plants: 38.76%
2.Purchase machinery & equipment, relocation: 18.31%
3.Repayment of bank borrowing: 9.72%
4.Part-financing working capital: 26.12%
5.Part-financing Other capital expenditure: 0.79%
6.Estimated listing expenses: 6.3%

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. The FYE2024 result have effect the IPO price RM1.07 not much in discount.

*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.