Initial Public Offering (IPO)

IPO - Siab Holdings Berhad (Part 1)

MQTrader Jesse
Publish date: Thu, 10 Feb 2022, 11:57 AM

History of Company

Siab Holdings Berhad was incorporated in Malaysia on 30 December 2020 under the Act as a private limited company under the name Siab Holdings Sdn Bhd. The company converted into a limited company on 24 June 2021 and assumed the present name. 
 
The  Company was incorporated to facilitate our Listing and our principal activity is that of an investment holding company. Our Group structure at LPD is as follows:
 
 
Through the subsidiaries, the company is principally involved in the provision of building construction service. To complement the building construction service, they also provide ICT solutions and services. 
 
The following is an overview of the Group’s business model: 
 
 

Use of proceeds

  1. Purchase of land and construction of storage facility - 16.61% (Within 24 months)
  2. Purchase of machinery and equipment - 35.74% (Within 24 months)
  3. Purchase of BIM system software - 8.35% (Within 24 months)
  4. Upgrade software and systems 2.21% (Within 18 months)
  5. Office expansion - 0.82% (Within 24 months)
  6. Working capital - 25.32% (Within 12 months)
  7. Estimated listing expenses - 10.95% (Within 3 months)

Research of the use for capital expenditure of the group

Purchase of land and construction of storage facility (16.61% - within 24 months)
The company has allocated RM 6.10 million for the purchase of land in Klang Valley with an approximate size of 2 acres and construction of a storage facility on the land to store the construction materials as well as new and existing construction machinery and equipment that are not in use in the construction. 
 
The purpose for the acquisition of land and construction of the storage facility is to accommodate the growth in the business which involves the purchase of additional construction machinery and equipment. The new storage facility will enable the company to accommodate and undertake maintenance works of their new and existing construction machinery equipment that are not in use at their construction sites. The storage facility will have an approximate built-up area of 43,500 square feet which will allow them to better organize the storage of their machinery and equipment.
 
The indicative timeline for the construction of the new storage facility is targeted to be as follows: 
 
 
 
Purchase of machinery and equipment (35.74% - within 24 months)
The company has allocated RM 13.13 million for the purchase of new construction machinery and equipment to support the business expansion and to replace certain fully-depreciated machinery and equipment. All the following machinery and equipment will be purchased from local suppliers. 
 
 
 
The purchase of this construction machinery and equipment is in line with the Group’s plans to further expand the building construction activities and expand into the civil engineering segment focusing on the construction of roads, bridges, and highways. 
 
 
Purchase of BIM system software (8.35% - 24 months)
The company has allocated RM 3.07 million for the purchase of BIM system software. BIM system software is a digital 3D modeling platform to integrate the planning, scheduling, costing, procurement, design specification, construction and facilitate operational data and information required to simulate the physical construction. 
 
The adoption of BIM system software is expected to enhance the operational efficiency in planning and coordinating the design and build service based on the following: 
  1. Simulations and benchmarking of construction projects and related processes can be produced promptly, therefore allowing optimization and modification of construction processes and construction design;
  2. Better understanding and analysis of construction projects through a more detailed and accurate visualization; 
  3. Design of buildings can be performed faster and construction can begin earlier which will improve workflow and speed up the construction process;
  4. Sophisticated design and drawings which are time-consuming to produce can be fast-tracked using advanced software; 
  5. Calculation and estimation of costs, especially those that are resulted from changes in the anticipated project design can be easily performed; and 
  6. Scenario analysis and alternative designs can be performed to have a complete overview of the changes in estimated costs derived from changes in design and inputs.
 
Additionally, the application of BIM system software is expected to contribute to more efficient project management, where the collaboration between various stakeholders in the construction industry value chain facilitates the design and construction process. This can be achieved through improvement in communication among architects, clients, contractors, and other relevant parties involved in the construction projects as all relevant information including design models, estimates, and information are shared and stored from one source. Parties involved in the construction project can see the information and provide their inputs, therefore, eliminating information silos, anticipating potential conflicts in advance and necessary improvements can be made beforehand. 
 
Upgrade software and systems (2.21% within 18 months)
The company allocated RM 0.81 million to upgrade to an integrated resource planning system to facilitate the business expansion. The integrated resource planning system will enable them to streamline the process, eliminate redundant processes through automation, centralized the data, and improve planning and reporting work. 
 
Office expansion (0.82% within 24 months)
The company allocated RM 0.30 million for office renovation costs and the purchase of office furniture and equipment.
 
Working capital (25.32% within 12 months)
The company intends to allocate RM 9.30 million to be used to supplement the working capital requirements for new and existing projects such as payment to subcontractors, payment to suppliers for purchase of construction materials, and maintenance costs and purchase of consumables and spare parts for construction machinery and equipment.
 

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Be the first to like this. Showing 5 of 5 comments

VenFx

I love that 6 lions in the picture.
Siab although looks mildly slow in 2 years time.

its share price might still cheers up when the construction theme time cooking hot.

2022-02-10 21:34

MQTrader Jesse

VenFx! Hi there! Thanks for your view! We will be releasing our MQ Trader view on our Part 2 blog.

Stay tune for our MQ Trader view on our upcoming Part 2 blog!

2022-02-11 12:08

VenFx

Looking forward to it
Gong Xi Fatt Choi MQ Trader

2022-02-11 18:08

hhc8

Public Investment fair value 0.33. Another broker 0.30

2022-02-16 16:01

brendancollin

Very tight Fair Values.
The offer price should be around 0.26-0.28

2022-02-16 20:16

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