CEO Morning Brief

Panda Eco Gains 62.5% on ACE Market Debut

edgeinvest
Publish date: Tue, 28 Nov 2023, 08:40 AM
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TheEdge CEO Morning Brief
(From left) Panda Eco System Bhd independent non-executive director Siew Suet Wei, independent executive director Datuk Leanne Koh Li Ann, independent non-executive chairman Nicholas Yap, executive director and chief executive officer Loo Chee Wee, executive director and chief technology officer Tay Kheng Seng, independent non-executive director Chan Kam Chiew, M&A Securities Sdn Bhd head of corporate finance Gary Ting, and M&A Equity Holdings Bhd managing director Datuk Bill Tan at the listing ceremony.

KUALA LUMPUR (Nov 27): Retail management solutions provider Panda Eco System Bhd made its debut on the ACE Market of Bursa Malaysia on Monday with an opening price of 29 sen — a premium of 81% to its initial public offering price (IPO) of 16 sen.

The most actively traded counter of the day with 190.37 million shares done, the stock pared some gains to end the trading day at 26 sen, still up 62.5% or 10 sen.

Phillip Capital has valued Panda Eco at 22 sen, and ascribed a 18 times price-earnings multiple (in line with its domestic software peers) on earnings per share (EPS) estimated for the financial year ending Dec 31, 2024 (FY2024).

In a note on Monday, the research house, which does not have a rating for the counter, estimated a three-year profit compound annual growth rate of 10% from FY2021 to FY2024, driven by the company's local business expansion and offering of new innovative products.

“Panda Eco stands out in terms of its product stickiness and high switching costs, [as well as a] niche and stable target market of retailers and grocers.

“In addition, Panda Eco should be able to capitalise on the digitalisation movement incentivised by the government for small and medium enterprises in Budget 2024.

“Key risks include the absence of long-term contracts and competition risks,” it said.

Meanwhile, Rakuten Trade has a “buy” recommendation on Panda Eco, with a target price of 30 sen, and said it expects Panda Eco to register core net earnings of RM8.1 million for FY2023, and RM10.2 million for FY2024.

“[We recommend] 'buy', with a fair value of 30 sen, based on 20 times price-earnings ratio (the average of peers with similar market capitalisation) over FY2024 EPS,” it said.

Read also:
Panda Eco prices IPO at 16 sen, seeks to raise RM17.5m on ACE Market
Retail management solutions provider Panda Eco System eyes ACE-Market listing

Source: TheEdge - 28 Nov 2023

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