Company Profile

- Primarily provides power distribution systems to industrial plants, and substations for industrial and commercial use.

- Customer base includes high-growth sectors such as semiconductors, medical equipment, and electrolytic copper foils for electric vehicles.

IPO Details

- Offering Price: RM0.280

- Application Period: 12/01/2024 ~ 18/01/2024

- Balloting Date: 22/01/2024

- Listing Date: 30/01/2024

- EPS: 1.65 (8 months)

- Market Capitalization: RM123.2 million

- PE Ratio: 11 times

- Funds Raised through IPO: RM24.3 million

- RM3.65 million for hiring staff, setting up new offices (in Kedah and Johor), and marketing

- RM1.75 million for transportation tools and construction equipment

- RM15.12 million for working capital for new orders (OPEX)

- RM3.80 million for listing expenses

Financial Performance

- FYE2020 Revenue = RM31.38 million, Net Profit After Tax = RM1.69 million (5.41% Net Profit Margin)

- FYE2021 Revenue = RM100.46 million, Net Profit After Tax = RM4.13 million (4.12% Net Profit Margin)

- FYE2022 Revenue = RM107.57 million, Net Profit After Tax = RM6.16 million (5.73% Net Profit Margin)

- FPE2023 (8 months) Revenue = RM138.57 million, Net Profit After Tax = RM7.25 million (5.24% Net Profit Margin)

- Gross Margin ranges between 10.54% ~ 15.64%

Key Strengths

- Experienced electrical engineering services team (16 years).

- Strong track record in HV, MV, LV, ELV power distribution systems.

- Serves high-growth sectors including semiconductors, medical equipment, and electronics products.

Potential Risks

- Future performance dependent on the company's ability to secure new orders.

- Rising costs in materials, subcontractors, and labor may not be fully passed on to clients.

- Past dependence to some extent on orders from Client A.

Industry Comparison

- Pestech S/B | Revenue = RM298.5 million, Net Profit After Tax = RM12.1 million (4.1% Net Profit Margin)

- Kinergy Advancement Bhd | Revenue = RM204.0 million, Net Profit After Tax = RM5.0 million (2.4% Net Profit Margin)

- Critical Holdings Bhd | Revenue = RM150.9 million, Net Profit After Tax = RM9.5 million (6.3% Net Profit Margin)

- Kelington Group Bhd | Revenue = RM1,278.8 million, Net Profit After Tax = RM58.5 million (4.5% Net Profit Margin)

Additional Information

- Currently bidding for data center orders projects, as well as orders in high-growth semiconductor and medical sectors.

- Malaysian electrical installation sector market value is RM3,118.0 million, with HEGROUP holding a 3% market share.

- Existing orderbook worth RM211.9 million, to be recognized as revenue in 2024.

- In the MEP industry, Mechanical works are carried out by CHB, Process Utilities are by KGB, and HEGROUP takes up the electrical role.