IPO Series – Manufacturing of Sheet Metal Products and Supply of Scaffoldings Company

Figure 1: Scaffoldings

Figure 2: Industrial racking systems

Utilization of Proceeds
-Capital expenditure (RM41.387 or 73.40%)
-Repayment of bank borrowings (RM4M or 7.10%)
-Working capital (RM5.5M or 9.75%)
-Estimated listing expenses (RM5.5M or 9.75%)

Figure 3: Utilization of Proceeds

Dividend Policy
-The group doesn’t have any formal dividend policy.

Financial Summary & Industry Overview
-The group recorded the highest revenue of RM246.078M in FY2023 as compared to FY2020, FY 2021, and FY2022 with the revenue of RM130.864M, RM222.435M, and RM236.231M respectively.
-The adjusted PAT was different in FY2021 and FY2022 with the amount of RM24.839M and RM23.511M respectively, however, the PAT in the subsequent was further reduced to only RM17.649M, producing PE 12.77x.
-Between 2021 and 2023, fabricated metal products grew at a CAGR of 11.0% and metal roofing sheets grew at a2.8%.
-Between 2021 and 2023, Malaysia grew at a CAGR of 6.2%, the construction industry grew at a CAGR of 5.6%, and the manufacturing industry grew at a CAGR of 4.4%.
-The group’s revenue is closely correlated with the global steel price, particularly the hot-rolled and cold-rolled coils.

Figure 4: Revenue, adjusted PAT, and adjusted PAT margin

Figure 5: Total assets, total equity, and total liabilities

Personal Opinion
-The group business nature is related to steel, which is part of the commodities section and can have a greater price fluctuation.
-Many IPOs are coming soon, and individual can allocate their fund accordingly.
-Based on the major customers in FY2023 such as Yes Group and ECRL, they were involved in the industrial racking systems as well as scaffoldings and contributed an amount of RM34.14M, which might be seen as a potential in getting more construction-related projects.

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