Background

TSA Group Bhd (TSA) is principally involved in the distribution and supply of ferrous and non-ferrous metal and other industrial hardware products, and manufacturing and processing of stainless steel pipes and other metal products.

IPO Statistic

The IPO entails a public issue of 77,325,000 new ordinary shares at an IPO price of RM0.55/share.

Public Issue:

• 15,465,000 new shares for application by the Malaysian public;

• 15,465,000 new shares for application by eligible parties;

• 38,662,500 new shares for private placement to Bumiputra investors approved by MITI; and
   
• 7,732,500 new shares by way of a private placement to selected investors.

Main Competitive Advantages

1. Established stainless steel player;

2. Able to offer a wide range of products; and

3. Extensive distribution network with large customer base.

Valuation

At an IPO price of RM0.55/share, TSA is priced at a trailing PER of 5.5x FY22 core EPS. We value the company at 10x CY25 EPS, arriving at a fair value of RM0.63/share.

Source: TA Research - 16 Jan 2024