Background

SBH Marine Holdings Berhad (SBH) is a vertically integrated frozen seafood specialist that involved in the processing of frozen seafood with a focus on shrimps and cephalopods.

IPO Statistic

The IPO entails a public issue of 180.0mn new shares and an offer for sale of 50.0mn existing shares. The share offers account for 25.9% of the group’s enlarged issued share capital.

Competitive Advantages

1. Vertically Integrated Business Model;

2. Diversified Regional Presence With a Strong Customer Base; and

3. Experienced Management Team

Valuation

At the IPO price of RM0.22/share, SBH is priced at a trailing PE of 15.0x against its FY23 EPS. As we assign a target PE of 12x against its FY25F EPS, we derive a fair value of RM0.24/share. Our valuations have taken into consideration the group’s plan to expand its regional presence and growing global population. In addition, we have also factored in SBH’s plans to expand its aquaculture shrimp farming and seafood processing plant, which will enhance profit margins and reduce dependence on third-party suppliers. Not Rated.

Source: TA Research - 22 Mar 2024