Industrial Product Stock IPO, K Seng Seng Corp (KSSC)



K Seng Seng Corp Bhd (KSSC), a supplier of secondary stainless steel products, is schedule to be listed in Main Market on 18th January 2011. The company, was established in 1985 under the name of Vinylon Industries Sdn Bhd. On 20 June 1986, the companny name was changed to K. Seng Seng Sdn Bhd

KSSC’s IPO consists of a public issue of 20 million ordinary shares at an IPO price of RM0.57 per share with RM0.50 par value.

6 million shares will be allocated for the Malaysian public, 9 million shares for identified bumiputera investors and 5.1 million shares for eligible directors, employees and business associates of the group. On top of that 22.2 million shares will be allocated for placement to identified investors.

The IPO will raise in RM11.47 million in proceeds. Of that, RM3.31 million will be used to buy machinery for the development and production of a new range of secondary stainless steel products. Another RM6.26 million is to fund working capital, and the rest will cover the listing expenses, estimated at RM1.9 million.

KSSC Group’s core revenue stream comes from processing secondary stainless steel flat and long products, which involves incorporating slitting and shearing of steel sheets, as well as cutting of secondary stainless steel products including round bars, flats, and angles.

For the time being, KSSC does not have fixed dividend policy. It is subjected to board discretion.

Profit after tax for financial end 2009, is RM7.15 million down from RM8.89 million in 2008 and RM7.5 million in 2007. For financial period end 31st August 2010, KSSC recorded profit after tax of RM3.76 million up from RM3.72 million from financial period end 31st August 2009.

For financial year end 31st December 2009, KSSC Earnings per Share is 9.42 sen with Profit Earning Ratio (PE Ratio) of 6.05 times.

OSK Investment Bank Bhd is the adviser, sole underwriter and sole placement agent of the IPO.

For those who are interested in KSSC IPO you may subscribed at ATM machines or via Internet Banking. The subscription period is opened until 6th January 2011.

View K Seng Seng Corp Bhd prospectus in Bursa Malaysia webpage. K Seng Seng Corp Bhd stock name in Bursa Malaysia is “KSSC”.

I think KSSC IPO is not attractive because of no dividend policy and profit after tax drop from a year earlier. However, PE Ratio is rather low.

What do you think about KSSC IPO? Are you going to subscribe?


Leave a Comment

  • mad 4th January, 2011, 10:39 am

    Agree, not very good IPO

    Reply
  • Sam 4th January, 2011, 10:41 pm

    I disagreed with your comment! I think this is a good company for investment because you check the NTA, most of the companies revalued the properties before IPO but this company do you realised that no revaluation reports and valued at net book value.

    Regarding the Dividend policy, I don’t known based on my personal opinion, most of the IPO companies normally wouldn’t put the dividend policy because after you committed you must paid on it even you not making a profit.

    For the profit after tax droped from a year earlier, I found out because of the gain on disposal of PPE of RM2.3 million, if you deducted the gain on disposal, you will realised that the PAT is increasing, please check the Management Discussion and Analysis.

    Reply
  • 1mdb.com 4th January, 2011, 11:53 pm

    Hi Sam, thank you for your informative comment. Are you going to subscribe?

    Reply
    • Sam 5th January, 2011, 4:32 pm

      Hi 1-million-dollar-blog, yes I will subcribe on it.

      Reply
  • 1mdb.com 6th January, 2011, 1:23 am

    Hi Sam,

    Good luck to you!. Are you in for short or long term? Do you have target price?

    Reply