ELK-Desa Resources Berhad IPO

ELK-Desa Resources BerhadELK-Desa Resources Bhd, one of the major independent hire-purchase financiers for used motor vehicles
is scheduled to be listed in Main Market of Bursa Malaysia on 18th December 2012.

The Initial Public Offering (IPO) consists of public issues of 25 million new ordinary shares at an IPO price of RM1.16 per share at RM1.00 par value.

Out of 25 million shares, 15.6 million shares allocated for Bumiputera investor approved by MITI, 4.9 million shares for application by Malaysian public and the remaining 4.5 million shares are made available to eligible employees of Unico-Desa, ELK-Desa Resources and subsidiaries.

The IPO exercise is expected to raise RM29 million, the bulk of which would be used for expansion plans and working capital which is to offer loans to borrowers.

ELK-Desa Resources is a wholly-owned unit of Unico Desa Plantations Bhd. ELK-Desa is primarily involved in hire-purchase financing for used motor vehicles and insurance agency business. It currently has over 700 motor vehicle dealers located in the Klang Valley

Currently, ELK-Desa Resources did not have any fixed dividend policy. However, for the financial year ending 31st March 2013, the board of directors intended to recommend and distribute about 50 per cent of its profit after tax to the shareholders as dividend. This translate to dividend yield of 5.50 percent or 6.38 sen based on FYE 2012 data and IPO price of RM1.16

The table below is the financial summary for ELK-Desa Resources Bhd.

FYE 2009 FYE 2010 FYE 2011 FYE 2012  FPE Aug 2011 FPE Aug 2012
Revenue (RM’000)  29,227 30,894 35,406 38,604  15,744  17,126
Profit after Tax (RM’000)  10,018 13,199 15,281 15,943  7,176  7,843
Earnings per Share (sen)*  8.01 10.56 12.22 12.75  5.74  6.27
Price Earnings Ratio (x)*  14.47 10.99 9.49 9.09  –  –

* Based on number of shares post IPO

MIDF Investment Banks is the principal adviser and underwriter of the IPO while JF Apex Securities is the co-underwriter.

For those who are interested in ELK-Desa Resources IPO, you may subscribe at ATM machines or via Internet Banking. The subscription period is opened until 6th December 2012 at 5pm. Tentative balloting date is on 10th December while the allotment date is on 14th December 2012.

ELK-Desa Resources stock name in Bursa Malaysia is “ELKDESA”.

View ELK-Desa Resources prospectus in Bursa Malaysia webpage.

What do you think about ELK-Desa Resources Group IPO? Are you going to subscribe?

6 comments… add one
  • What do your think about share? any comment.

    • Ally, based on financial report, the income growth every year which is good. They also pay reasonably good dividend although only for the first year. Doesn’t look to be a bad IPO to apply.

  • Noted. thanks bro

  • IPO which provides credit services with interest…is it shariah compliant?

    • mell, this IPO is not shariah compliance.

  • If need syariah compliance thn better dont apply ipo or buy shares


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