TA Sector Research

Colform Group Berhad - An Integrated Steel Player in East Malaysia

sectoranalyst
Publish date: Wed, 22 Jan 2025, 12:14 PM

Background

Colform Group Berhad (COLFORM), headquartered in Sabah, Malaysia, has been operating for 20 years as a manufacturing and investment holding company specialising in downstream steel products. Its operations include the production of roofing sheets, wall claddings, roller shutters, and steel framing systems, as well as the processing of steel coils and the manufacturing of colour-coated coils. In addition to its manufacturing capabilities, the company trades steel products and building materials, while also providing supply, installation, and project management services for construction projects.

IPO Statistic

The IPO entails a public issue of 114,424,000 new ordinary shares and an offer for sale of 54,000,000 shares at an IPO price of RM0.36/share, which accounts for 28.1% of the group’s enlarged issued share capital.

Public issue:

  • 30.0mn new shares for application by the Malaysian public,
  • 6.0mn new shares for application by eligible parties,
  • 75.0mn new shares for MITI,
  • 3.4mn new shares for private placement to selected investors, and
  • 54.0mn offer for sale of existing shares.

Main Competitive Advantages

  1. Offers Wide Range of Steel Products;
  2. Local Market Knowledge for Competitive Growth; and
  3. Commitment to Quality on Industry and Standing and Reputation.

Valuation

At an IPO price of RM0.36/share, COLFORM is priced at a trailing PER of 11.9x annualised FY24F core EPS. We ascribe a target PER of 14x CY25 EPS, a 10% premium to the peers’ average and arrive at a fair value of RM0.52/share. We believe the premium is fairly justified by its higher core net margin and ROE compared to its listed peers’ average. Not Rated.

Source: TA Research - 22 Jan 2025

Discussions
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Good123

open at 50sen & above most likely :)
At an IPO price of RM0.36/share, COLFORM is priced at a trailing PER of 11.9x annualised FY24F core EPS. We ascribe a target PER of 14x CY25 EPS, a 10% premium to the peers’ average and arrive at a fair value of RM0.52/share. We believe the premium is fairly justified by its higher core net margin and ROE compared to its listed peers’ average.

1 week ago

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