IPO

Thursday, August 8, 2024

VETECE HOLDINGS BERHAD

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***Disclaimer***Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision.
Open to apply: 08 Aug 2024 
Close to apply: 14 Aug 2024
Balloting: 16 Aug 2024
Listing date: 28 Aug 2024

Share Capital 
Market cap: RM98 mil
Total Shares: 392 mil shares

Industry CARG 
Historical market size (revenue) and growth forecast for the Enterprice IT services industry in Malaysia (2020-2028): 5.36%
Industry competitors comparison (net profit%)
1.Vetece : 28.4%
2.Ramssol Group Berhad: 19.8% (PE18.9)
3.Microlink Solution Berhad: 10.5% (recent Q4 24 losses)
4.Tentacle Technologies MSC Sdn Bhd: 17.4%
5.Infomina Berhad: 15.9% (PE22)
6.Others: 0.7% to 17.90%

Business (FPE 2024) 
Provide implementation services, as well as maintenance, support and professional services and the resale of hardware and software. 
Revenue by Segment
Implementation services: 51.29%
Maintenance, support and professional services: 44.85%
Resale of hardware and software: 3.86%
Revenue by Geo
Malaysia: 97.05%
Singapore: 1.08%
Hong Kong: 1.87%

Fundamental
1.Market: Ace Market
2.Price: RM0.25
3.Forecast P/E: 19.23 (we disagree prospectus book pg25 @ PE14.93)
4.ROE(Pro forma): 13.07%
5.ROE: 26.43%(FPE2024), 42.39%(FYE2023),  46.44%(FYE2022), 17.51%(FYE2021)
6.Net asset: RM0.10
7.Total debt to current asset: 0.068 (Debt: 2.349mil, Non-Current Asset: 7.319mil, Current asset: 34.27mil)
8.Dividend policy: didn’t have formal dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%) 
2024 (FPE 31 Mar): RM11.265 mil (Eps: 0.0076), PAT: 26.49%
2023 (FYE 31 Aug): RM23.133 mil (Eps: 0.0167), PAT: 28.38%
2022 (FYE 31 Aug): RM20.842 mil (Eps: 0.0106), PAT: 19.92%
2021 (FYE 31 Aug): RM20.045 mil (Eps: 0.0080), PAT: 15.66%

Order Book 
1.FYE 2024: 2.465 mil
2.FYE 2025: 5.717 mil
3.FYE 2026: 1.064 mil

Major customer (FPE2024)  
1. Telekom Malaysia Berhad Group: 53.54%
2. Client C: 7.91%
3. Client E: 5.82%
4. Client A Group : 8.98%
5. Client F: 3.84%
***total 100%

Major Sharesholders 

1. Tee Chee Chiang: 61.32%
2. Chan Wai Hoong: 3.36%

Directors & Key Management Remuneration for FYE2024 
(from Revenue & other income 2023)

Total director remuneration: RM0.723 mil
key management remuneration: RM0.90 mil – RM1.10 mil
total (max): RM1.823 mil or 18.72%

Use of funds (MYR) 
1. Roll out of new core products and services: 2.92mil, 8.95%
2. Strengthening of Singapore operations: 3.293mil, 13.44%
3. Establishment of a COE for software solutions: 3.795mil, 15.49%
4. Hardware and software licensing fees: 6.52mil, 26.61%
5. Loan repayments: 4.004mil, 16.34%
6. Estimated listing expenses: 4.696mil, 19.17%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is high risk investment, and also come with high grow return opportunities. 

*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.