CROPMATE BERHAD

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Open to apply: 15/11/2024
Close to apply: 22/11/2024
Price determination date: 22/11/2024
Balloting: 27/11/2024
Listing date: 05/12/2024

Share Capital 
Market cap: RM147.6 mil
Total Shares: 738 mil shares
1st day listing tradable shares: 331.7 mil shares

Industry CARG (2019-2023)  
1. Sales value of domestic manufactured fertilisers : -4.5%
2. Import value of fertilisers: 12.6%
3. Import volume of fertilisers: 12%
4. Export value of fertilisers: 11.5%
5. Export volume of fertilisers: -0.6%
6. Apparent consumption value of fertilisers: -1.5%

Industry competitors comparison (net profit%)
1. Cropmate Group: 6.6%
2. Hextar Fert S/B: 9.4%
3. Twin Arrow Fertilizer S/B: 9.3%
4. Farmcochem S/B: 7.7%
5. Other: losses to 4.3%

Business (FYE 2024)  
Involved in the formulation and blending of conventional and specialty fertilisers as well as trading of straight fertilisers and related products.
Revenue by segment
1. Formulation and blending of conventional and specialty fertilisers: 75.3%
2. Trading of straight and other fertilisers: 24.7%
Revenue by brand
1. Own Brands: 73%
2. Without Brands: 24.6%
3. Third-party brands: 2.4%

Fundamental  
1.Market: Ace Market
2.Price: RM0.20  (Price will follow final institution price)
3.Forecast P/E: 14.7
4.ROE(Pro forma IV):  17.05%
5.ROE: 36.64%(FPE2024), 27.12%(FYE2023),  47.12%(FYE2022), 46.49%(FYE2021)
6.Net asset: 0.11
7.Total debt to current asset: 0.586 (Debt: 43.760mil, Non-Current Asset: 47.656mil, Current asset: 74.635mil)
8.Dividend policy:  PAT 30% dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)   
2024 (FPE 31May): RM67.311 mil (Eps: 0.0076), PAT: 8.3%
2023 (FPE 31Dec): RM151.547 mil (Eps: 0.014), PAT: 6.6%
2022 (FYE 31Dec): RM188.296 mil (Eps: 0.020), PAT: 7.8%
2021 (FYE 31Dec): RM108.799 mil (Eps: 0.010), PAT: 7.0%
***2024 EPS diluted to 738mil shares should be 0.0076, hence we disagree with prospectus pg.232 EPS.  

Major customer (FPE2024) 
1. Agrivest Trade Sdn Bhd: 9.1%
2. Sinong Group: 5.0%
3. Great Organic Group: 3.6%
4. Golden Agrochem (Kuching) Sdn Bhd: 3.1%
5. Consolidated Fertiliser Corporation Sdn Bhd: 2.7%
***total 23.50%

Major Sharesholders   
1. Lee Chin Yok: 29.1% (direct), 26% (indirect)
2. Lee Cheng Seng: 13% (direct)
3. Lee Cheng Fei: 13% (direct)
4. Lau Sam Siong: 6.5% (direct)
5. Datuk Tan Chew Chin: 3.2% (direct)

Directors & Key Management Remuneration for FYE2024 
(from Revenue & other income 2023)
Total director remuneration: RM1.460 mil
key management remuneration: RM0.8mil – RM1.0mil
total (max): RM2.46 mil or 8.9%

Use of funds   

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)

Overall is low growth industry, however the timing of IPO quite favor to the company (the open of fresh durian can export to China, and the price of FCPO price).

*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.