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Thursday, 29 June 2017

KAB (Kejuruteraan Asastera Berhad) target listed on ACE Market of Bursa Malaysia.; list to raise 112 million shares.

Malaysia: Electrical, mechanical and telecommunications contractor Kejuruteraan Asastera Bhd (KAB) has filed a draft prospectus for an initial public offering (IPO) on the ACE Market of Bursa Malaysia.

The IPO will consist of 112 million shares, including a public issuance of 80 million new shares and offer for sale of up to 32 million existing shares, according to the draft on the Securities Commission Malaysia (SC) website. The IPO price of its shares and listing date are undisclosed, and the prospectus has yet to be registered by the SC.

Of the public issue, 16 million shares will be set aside for application by the Malaysian public, eight million will be offered to eligible employees and persons, and 56 million will be available to institutional and selected investors.

"The public issue will increase our issued share capital from RM12 million comprising 240 million shares, to [an unspecified value] comprising 320 million shares,” KAB said.

The offer for sale is made by managing director Datuk Lai Keng Onn, currently holding a 95% stake in the company. His shareholding is expected to be diluted to 61.25% following the IPO, KAB said.

Of the proceeds, a planned 58% is allocated for working capital, including tender deposits, tender bonds and on-site expenses, 17% for listing expenses and 12.5% for capital expenditure.

KAB has also proposed to establish a new branch office in Johor Baru and an additional office in Kuala Lumpur using 3.4% of the proceeds.

The group registered a net profit of RM6.56 million for its financial year 2016 (FY16), giving it a basic and diluted earnings per share of 2.05 sen based on an enlarged share base of 320 million shares planned for its listing. Revenue for FY16 totalled RM93.12 million, resulting in a profit after tax margin of 7%.

"Provision of electrical engineering services is our business’ largest segment, which had consistently accounted for more than 80% of our revenue [from 2014 to 2016],” KAB said in the draft prospectus.

"The second-largest segment of our revenue is [the] sale of goods, which accounted for 12.5%, 7.5% and 7.1% respectively in FY14 to FY16,” it said.

Its order book as at Dec 31, 2016 amounted to RM186.21 million and gives it visibility in earnings until FY19, with RM99.67 million or 53.53% of the aforementioned sum expected to be recognised in FY17.

In April 2015, ConnectCounty Holdings Bhd proposed to acquire KAB for RM25 million, but it was aborted due to the latter's strategic plans' realignment and weak market sentiment, executive deputy chairman Ang Chuang Juay told The Edge Financial Daily in an interview last year.


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Wednesday, 28 June 2017

U Mobile long-awaited IPO malaysia's youngest telecommunications operator positive by 2018.

THE long-awaited initial public offering (IPO) of U Mobile Sdn Bhd, the country's youngest telecommunications operator, could take place within the next one year. This, however, can only happen if the loss-making company manages to break even within that time frame.

Launched in 2007, U Mobile has made an impact on the market as its subscriber base grew from less than 50,000 to over four million in less than five years. Over the years, it has been seen as a serious challenger to the Big Three telcos — Maxis Bhd, DiGi.Com Bhd and Celcom Axiata Bhd.

According to CEO Wong Heang Tuck, his immediate target is to make U Mobile “IPO-able” by 2018, as the company is expected to become Ebitda (earnings before interest, taxes, depreciation and amortisation) positive by then.

"We are targeting Ebitda break-even and IPO in about two to three years. By then, we would have grown much bigger in size. Of course, if we do well, the plan will be accelerated,” he tells The Edge in an interview.
Wong was appointed CEO in April 2014. Since he joined the company as chief operating officer in 2013, U Mobile's revenue and market growth have outperformed the industry average.

Previously, Wong was chief financial officer of WBL Corp Ltd, a Singapore-listed multinational conglomerate. He has more than two decades of experience in finance, business and corporate development.

U Mobile is, today, the fourth largest mobile operator in Malaysia, with a market share of close to 8%. Wong says it is aiming for a double-digit market share in the coming years, which should help it build its profit track record, or at least, break even.

"Ebitda positive is a key milestone for us before we do the IPO, because that will give investors confidence,” he says. However, he declines to reveal U Mobile’s Ebitda figures.

A quick check on the Companies Commission of Malaysia's website shows that U Mobile's net loss contracted to RM191.82 million in its financial year ended Dec 31, 2014 (FY2014) from RM363.24 million in FY2013. Revenue rose from RM919.17 million to RM1.26 billion.

U Mobile has allocated a capital expenditure (capex) of RM3 billion to RM4 billion for its five-year expansion plan, mainly to expand its third generation (3G) and fourth generation long-term evolution (4G LTE) network infrastructure by rolling out 5,000 new base stations to cover the whole country.

To date, it owns 3,200 network sites for 3G and 1,281 sites for 4G. It also has 1,880 network sites for 3G that are shared with Maxis.

On the capex, Wong says the company's existing shareholders are committed to pump in more money, but the company “cannot depend on them all the time”. And that is how the IPO plan came into the picture.
“We are not going for a listing for the sake of going for a listing. Yes, our [current] shareholders are a source of funds, but eventually, we need multiple sources of funds,” he says.

He adds that the most efficient way to raise funds is through a combination of capital market, equity market and loan market. In order to tap these sources of funds, the best way is to go for a listing.

"A telco is like a utility firm. Investment in technology is a must; the day the telco stops investing is the day it dies,” he explains.

While it is still too early to tell how big the IPO will be, Wong acknowledges that the five-year capex plan will tap into the IPO funds. “Maybe 25% to 30% will be fresh funds coming from the equity market. Once we go for a listing, we can have a series of bond and loan [issuance].”

On U Mobile's listing destination, he says the priority is Bursa Malaysia. However, he did not rule out the possibility of floating its shares on other stock exchanges, including Singapore and Jakarta, as well as a primary listing in Shanghai, China, and a secondary listing in Kuala Lumpur.

"If you look at the regional bourses today, Malaysia has the best valuation for telcos, be it Ebitda multiple or price-earnings ratio. But three years later, I wouldn't know,” he says.

Currently, Straits Mobile Investments Pte Ltd, a unit of Singapore Technologies Telemedia, is the single largest shareholder of U Mobile with a 49% stake.

U Telemedia Sdn Bhd, a private investment by local tycoon Tan Sri Vincent Tan Chee Yioun, is the second largest shareholder with a 21.46% stake.

Tan, who is the chairman of U Mobile, also has a 6.2% direct stake in U Mobile as well as 2.01% equity interest via Berjaya Infrastructure Sdn Bhd.

It is worth noting that U Mobile on Dec 18 announced that Sultan of Johor Sultan Ibrahim Sultan Iskandar has acquired an additional 5% stake in the company, raising his holding to 15%. Sultan Ibrahim acquired his initial 10% stake in U Mobile in 2014.

Locally listed Magnum Bhd also has a 6.33% stake in U Mobile. Low-profile Thai-born tycoon Tan Sri Surin Upatkoon, who is the non-executive chairman of Magnum, also sits on the board of U Mobile as director.


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Tuesday, 27 June 2017

LCT (Lotte Chemical Titan Holdings Bhd) IPO - Worth to participate? - Ifrit2020

Conclusion: Lotte Chemical Titan Holding Bhd is a decent stock to hold for capital gain over a period of 2-3 years. After that investor needs to reevaluate its business potential by looking at the ROI in Indonesia and the impact of RAPID upon project completion before to decide to hold for longer term.


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LCT (Lotte Chemical Titan Holdings Bhd) sum up with 50% of profit as dividends result a dividend yield of around 3.3%.

Malaysia: Lotte Chemical Titan Holdings Bhd, which has secured four cornerstone investors, will be paying out half of its profits as dividends, which works out to a dividend yield of around 3.3%, sources said.

This is based on the RM1.31bil in net profit the company recorded in financial year 2016.

Lotte Chemical, which will be launching its prospectus this week, is coming to the market at a price earnings (PE) multiple of around 12 times historical earnings, sources added.

In comparison, Petronas Chemicals Group Bhd trades at a PE multiple of 16 times historical earnings at its current price of RM7.22 per unit, and carries a dividend yield of 2.63%, Bloomberg data showed.

It has been reported that Lotte Chemical has already secured four cornerstone investors, namely Great Eastern Holdings Ltd, Eastspring Investments Bhd, Permodalan Nasional Bhd and Malayan Banking Bhd's asset management arm, Maybank Asset. The initial public offering (IPO) is looking to raise RM6bil, out of which slightly more than RM1bil will be taken up by the cornerstone investors.

The IPO entails a retail offering of 55.8 million shares, institutional size of 400.8 million shares, and MITI-approved selected bumiputra investors portion of 283.9 million shares.

At a tentative list price range of RM7.80 to RM8, Lotte Chemical will have an estimated market capitalisation of RM19.7bil, compared with Petronas Chemicals’ market cap of RM57.7bil.

Lotte Chemical, which produces polyethylene and polypropylene, is due to be listed on July 11.

The bulk of the proceeds from the IPO has been earmarked to partly fund Lotte Chemical's RM15.5bil integrated petrochemical facility in Banten province, Indonesia while some will also be used to expand its existing plant in Malaysia.

Lotte Chemical presently owns and operates 14 plants across Indonesia and Malaysia.

These plants have a combined production capacity of about three million tonnes per annum.

Its plastic products are exported to about 60 countries. Lotte Chemical's IPO will be the largest in Malaysia since Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd back in 2012, with funds raised amounting to RM10bil and RM6bil respectively.

The South Korean Lotte Group bought Bursa-listed Titan Chemicals Corp in a deal valued at about RM3bil in 2010 and later de-listed the company in 2011.


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Monday, 26 June 2017

Introduction of the #Bursa IPO around LCT (Lotte Chemical Titan Holdings Bhd).

Petronas Chemicals Intimate Lotte Chemical Titan not a big threat.

Image result for Lotte Chemical Titan not a big threat

Malaysia: Petronas Chemicals Group Bhd (PCG) is unfazed by the proposed listing of Lotte Group's Malaysian unit Lotte Chemical Titan Holding Bhd on the Main Market of Bursa Malaysia this year.

PCG managing director and CEO Datuk Sazali Hamzah said Lotte's market is mainly in Korea and any expansion that the group does is mainly through their Korean market.

"Definitely anybody that comes into the market will be a competitor for us but we feel there is still a lot of room to play and to compete with them as well. It is not really a big threat to us,” he told reporters at its AGM yesterday.

According to the draft prospectus submitted by Lotte Chemical Titan, it will use the proceeds raised from the initial public offering to partially finance the development of its integrated petrochemical facility in Banten Province, Indonesia and two other projects in Pasir Gudang, Johor.

"It is not direct competition because we believe most of the products they produce will be shipped to Korea. So we are directly competing in the Korean market but not in Southeast Asia, because in Southeast Asia we have a very strong, established position and our commission network is also quite huge. We believe that we will be able to sustain our market position,” said Sazali.

For the current financial year ending Dec 31, 2017 (FY17), PCG has allocated RM4 billion for capital expenditure (capex), similar to the amount spent last year. The bulk of the capex will be spent on the Pengerang Integrated Complex (PIC) in Johor.

The group will fund the capex with internally generated funds. As of Dec 31, 2016, its cash stood at RM7.4 billion.

Last week, PCG approved the final investment decision for a US$442 million (RM1.9 billion) isononanol (INA) plant located in PIC. Sazali said the investment will be spread over three years until 2019 and for FY17, it will only be spending 10% of the total amount.

He said INA, which is used for the production of plasticiser, has low toxicity, which is an advantage for PCG as some of its competitors’ products have been banned from some markets due to higher toxicity.

"We see that there is very high potential for this product in Southeast Asia as well as in Asia Pacific. The reason is related to the population growth in this region. This product is used for the manufacturing of toys, cables, automotive for example, car dashboard. This kind of demand we predict will continue to grow,” he added.

He said the route-to-market activities have already been done and it has met some of the potential clients. There have also been requests for the product to be further processed.

Sazali said the margin of specialty products, including INA, is normally twice the margins of basic chemicals. Upon completion, the INA project will be the largest in Southeast Asia and Asia Pacific with 250,000 metric tonnes per annum capacity.

"Our competitor is one plant in China, about 180,000 metric tonnes per annum and we believe that is not sufficient to support the demand of this region,” he said.

Commenting on petrochemical prices, chairman Md Arif Mahmood said the prices trend very closely to oil prices, especially for oleofins.

"If you look at the oil prices in the last couple of months, it hovers around US$50 to US$55 (per barrel) and it keeps on moving. That's the reason why we are saying the prices, because it tracks also the crude prices, it would be volatile … if you look at what it was in 2016, hopefully we'll have a slight improvement in 2017,” he said.

He said PCG will focus on ensuring reliability of operations and higher utilisation at its facilities to reduce unit cost and improve margins. It will also boost marketing efforts to remain competitive.

Overall, PCG aims to grow its capacity by 49% to 16.1 million tonnes per annum by 2020, from the 10.8 million tonnes per annum currently.


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Friday, 23 June 2017

Advancecon (Advancecon Holdings Bhd), within listed IPO in Bursa saham.

The Initial Public Offering (IPO) consists of 123 million new ordinary shares and offer for sale of 33 million existing shares at an IPO price of RM0.63 per share. 88 million shares will be for institutional investors, private placement & selected investors and the remaining 35 million shares made available to the eligible directors and employees of Advancecon Holdings Berhad and Malaysian Public.

A statement or a financial summary of Advancecon Holdings.


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Scope of earthworks and civil engineering services by Advancecon (Advancecon Holdings Bhd).

·         Site clearance, Earthwork and associated infrastructure works for Setia EcoHill

·         Site clearance and earthworks for Setia EcoGarden

·         Construction and completion of detention pond at Cyberjaya flagship zone.

·         Construction and completion of Trumpet Interchange at Lekas Highway for Eco Majestic

·         Construction and completion of link road and associated infrastructure work from Eco Majestic interchange to housing development of Eco Majestic

·         Construction and completion of infrastructure and landscape work for existing Bukit Jalil National Sports Complex

·         Site clearance, earthworks and detention pond for Nilai Impian

·         Earthworks for 86 blocks & 5 storey with 2 basement car parks for mixed development at Perdana Park City.


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