Background

The Evergreen Max Cash Capital Berhad (EMCC) group of companies is principally involved in the pawnbroking services business, i.e., providing short-term secured pawn loans. EMCC is also engaged in the retail and trade of pre-owned and new gold and luxury products, as well as providing pawnbroking consultancy and IT solutions to third-party pawnbrokers.

IPO Statistic

The IPO entails a public issue of 267,600,000 new ordinary shares and an offer for sale of 43,000,000 shares at an IPO price of RM0.24/share.

Public issue:

55,700,000 new shares for application by the Malaysian public; 27,900,000 new shares for application by eligible parties; and 44,600,000 new shares for private placement to selected investors; and 139,400,000 new shares for private placement to selected Bumiputera investors

Main Competitive Advantages

Positioned to serve the unbanked or underbanked population; Supported by a network of pawnbroking outlets in strategic locations; Led by a hands-on and experienced management team and Possess a proprietary pawn processing system.

Valuation

At an IPO price of RM0.24/share, EMCC is priced at a trailing PER of 13.3x FY22 EPS. Ascribing a 10% discount to Malaysia’s average NBFI (including Pappajack) P/B ratio of 2.1x due to EMCC’s smaller market cap to FY23e BV, we arrive at a fair value of RM0.32/share.

Source: TA Research - 11 Sept 2023